The technical strategy teams at SocGen and Credit Suisse provide some insights on EUR/USD setup and projected path in the near-term.
SocGen: Descending Channel At 1.04 Key.
"After breaching the flag formation, EUR/USD is now closing in on March lows near 1.0550/1.05. More importantly this is the multi decadal upward channel support. Monthly RSI has retraced after testing a horizontal resistance which suggests there is a possibility of further downtrend towards monthly descending channel at 1.04. The ongoing correction is retracing the 2000-2008 up move however a break below 1.04 will confirm that this is in fact a downtrend of a larger degree.
In such a scenario we can expect retracement of the whole up cycle since the 1980s and first meaningful support will be at 1.00/0.9930 and next at graphical levels of 0.96/0.9530 consisting of 1989 lows, 2001 highs and a projection for the down move. July lows of 1.08/1.0830 are likely to be an immediate resistance while flag limit at 1.1270 will be an important hurdle," SocGen projects.
Credit Suisse: 13-Day MA At 1.0669 Key.
"EURUSD remains capped beneath its falling 13-day average, currently at 1.0669, and is in the process of removing last week’s low at 1.0566. This keeps us directly bearish to test the April low at 1.0521 next. We allow for a fresh bounce here, but expect follow through beneath it in due course to test the 1.0458 low for the year.
Bigger picture, we continue to look for weakness to extend to our long-held 1.0109/.9921 target zone. We expect this to prove much stronger support. Resistance moves to 1.0605/11, with 1.0670/89 expected to cap to keep the trend directly lower," CS projects.
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