EURUSD continues to recover

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The euro inched higher supported by the ECB’s shift to normalizing its monetary policy. The psychological effect of parity had triggered a ‘buy-the-dips’ behavior. A surge above 1.0200 prompted the short side to cover their positions and turned short-term sentiment around. The bulls further consolidated their gains above 1.0130, paving the way for a sustained rebound. A close above 1.0270 would attract momentum buying and send the single currency to the previous daily support-turned-resistance at (1.0440).
 

GBPJPY tests resistance

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The Japanese yen softened after the dovish BoJ meeting minutes. On the daily chart, the pair is swinging in a flag consolidation. The uptrend is still intact and the bulls may see the choppy price action as an opportunity to accumulate in anticipation of a bullish continuation. 163.00 on the lower band of the flag pattern is the closest support. A break above 165.10 would bring the pound to the upper band (165.90) where a breakout could resume the rally. A bearish breakout though might cause a sell-off below 161.80.
 

GER 40 attempts to rebound

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The Dax 40 treads water as business sentiment remains sensitive to energy uncertainty. Optimism grew after the price broke above the supply zone around 13400. The sideways action suggests a commitment to keep the rebound intact. A close above 13400 may raise bids to 13650, a key resistance from the mid-June sell-off and the bears’ last stronghold. A bullish breakout could lead to a full-blown recovery as sellers capitulate. On the downside, 13000 is fresh support and its breach would send the index back to 12820.

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