Karen Jones, Head of FICC Technical Analysis at Commerzbank, suggests “EUR/USD last week reversed ahead of key resistance at 1.3150/80… and has sold off to the 1.2880… While it is possible that this will hold the initial test, we look for rebounds to now be contained by the 1.3021/235 end of October highs. We regard the 1.2880/76 support as exposed”. The analyst adds that a breach of 1.2815 would accelerate declines towards 1.2785 en route to 1.2661/24
Analyst Sean Callow at the Australian bank Westpac comments “We noted last week that we couldn’t see the fuel for sustained gains beyond 1.3050/1.3100 given the ECB meeting. The subsequent reports that a rate cut is near and Italy’s latest political farce reinforce EUR concerns but Fed QE should help limit downside”.
In the meantime, Strategist Geoffrey Yu at UBS recalls the bank’s bullish stance on the cross, adding “As trend indicators are bullish, there is scope for the pair to resume strength. Resistance is at 1.2973 ahead of 1.3127. Support lies at 1.2840”.