A short-term corrective pullback is possible, as overbought daily studies unwind, but downside risks are expected to remain limited, as momentum studies and the proprietary Tension Indicator, (not shown) show fresh signs of improvement.
Support is at congestion around 1.2350, but any immediate break should stabilise above 1.2200 as investors adopt a positive tone. A close beneath here, however, would turn sentiment cautious once again, as focus subsequently turns back to 1.2000.
In the coming weeks, fresh tests higher are looked for, with a break above the 1.2728 high of 13 December targeting critical resistance within the 1.2775-1.2800 area. This area should cap immediate tests, but if broken, the 1.3000 break level will attract in a sharp rally.