EUR/USD remains capped below its 200-day average at 1.1998/1.2007. Economists at Credit Suisse look for a test of its uptrend from last year and 78.6% retracement of the March/May rally at 1.1847/24.
EUR/USD was capped just ahead of the 200-DMA at 1.1998/1.2007
“EUR/USD reversed sharply off its highs again on Friday from just ahead of a key cluster of resistances at 1.1986/1.2007 – the 200-day average, price resistance and the 38.2% retracement of the May/June fall, in line with our bias for this zone to cap the market for a resumption of the sell-off from late May.”
“For now, the pair remains trapped in its tight range of the past few days, with support still seen at 1.1920/12 initially, below which would complete a small intraday top. Thereafter, a move below 1.1880 is needed for a move back to the uptrend from March last year and recent low at 1.1847, with the 78.6% retracement of the March/May rally just below at 1.1824.”
“Whilst a fresh hold at 1.1824 should be allowed for, a break in due course should see the lower end of the converging range, now at 1.1763.”
“A close above 1.2007 would instead ease the immediate threat of further weakness and reinforce a broader sideways converging range, with resistance seen next at 1.2074.”