The pair accelerated higher on Tuesday, extending strong recovery rally from 1.2887 (28 Aug low) into fourth straight day.
Fresh bulls, boosted by rising fears about escalation of US/China trade tensions, broke above significant barriers at 1.3107/12 (bear-channel upper boundary/55SMA); 1.3136 (50% of 1.3386/1.2887) and 1.3166/74 (top of daily cloud/former high of 16 Aug), generating strong bullish signal.
The rally is on track for the biggest one-day gains since 19 July and pressures pivotal barrier at 1.3195 (Fibo 61.8% of 1.3386/1.2887 descend), break of which would mark another bullish signal.
However, bulls may show hesitation here as slow stochastic is overbought and momentum turned to sideways mode.
Focus turns towards release of US Manufacturing PMI as forecast signals slowing in August, with outcome at/below consensus to likely slow down dollar’s bulls. Corrective dips could be seen as positioning for fresh upside, as sentiment remains positive, with broken 55SMA expected to ideally contain.
Res: 1.3195; 1.3227; 1.3268; 1.3289
Sup: 1.3136; 1.3112; 1.3077; 1.3051
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