EUR/USD Outlook: Euro Loses Traction After Strong Post-ECB Rally, But Bulls Are Still In Play

The Euro eases from new one-month high, posted after Thursday’s post-ECB 0.7% advance (the biggest one-day rally since May 5).

Traders reacted on ECB Lagarde’s less dovish than expected speech , while US GDP data miss added to positive sentiment.

Thursday’s close above pivotal Fibo barrier at 1.1671 (38.2% of 1.1909/1.1524) which repeatedly capped the action last week, was strong bullish signal, which requires confirmation on weekly close above this level, with daily Tenkan-sen crossing above Kijun-sen and underpinning the action.

On the other side, GDP data from EU and Germany showed that economies slowed significantly in the third quarter, although mainly in line with expectations, while EU inflation shot past expectations and rose to the highest in 13 years that may weigh on the single currency.

Technical studies on daily chart remain bullishly aligned with limited dips seen as buying opportunities.

Tenkan-sen / Kijun-sen bull-cross (1.1637) marks pivotal support which needs to hold extended dips and keep alive hopes for fresh push higher, however, today’s close below broken Fibo barrier at 1.1671 would soften the sentiment.

Caution on break and close below 1.1637 that would signal false break and confirm double-top (1.1692/90).

Res: 1.1671, 1.1700, 1.1716, 1.1755.
Sup: 1.1637, 1.1615, 1.1602, 1.1582.