Europe’s single currency extended upside Tuesday amid healthy Eurozone PMIs and additional dollar softening under 97.00 (DXY). Despite an early rebound from the underside of 1.13 on the H4 during early London hours (see M30 for clearer view), the level eventually yielded and unlocked the door to Quasimodo resistance nearby at 1.1340, which held into the close.
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Upbeat risk sentiment weighed on the US dollar index Monday, firmly snapping a four-day bullish phase. EUR/USD H4 reclaimed 1.12+ status and recently conquered 1.1250, with eyes now on 1.13 as potential resistance, followed by a Quasimodo formation at 1.1340.
The British pound put in additional declines against the buck last week, extending south of the 61.8% Fibonacci retracement ratio at 1.2718 and 2019 yearly opening level at 1.2739. It should also be emphasised these levels are positioned beneath a long-term trend line resistance, etched from the high 1.5930.
Driven by USD strength Thursday, with the US dollar index recently shaking hands with 97.50, EUR/USD tackled H4 support at 1.1221 and the round number 1.12. This exposed a 38.2% Fibonacci retracement ratio at 1.1173 and a potential 127.2% AB=CD correction (black arrows) at 1.1150.
