EUR/USD has been trapped in a broad sideways range since basing in March 2015, notes Credit Suisse.
"For now, our bias is for price and retracement resistance at 1.1495 to ideally cap – the October 2015 and April 2016 highs and 78.6% retracement of the August/December decline – with a break below 1.1144/06 needed to mark a fresh top in the range, for a slide back to 1.0883/22 initially.
Above 1.1495 would suggest strength can extend back to the 1.1714 August 2015 high, and more likely 1.1808 – the 38.2% retracement of the 2014/2015 collapse," CS argues.
"With a multi-year top in place we remain of the view this range will eventually be resolved to the downside, for a move to our parity target, but there is a clear risk we could yet see further lengthy ranging first, even a deeper recovery," CS adds.
Turning to AUD/USD, CS notes that whilst still capped beneath price resistance at .7691, the broader risk is seen as lower for now.
"Support shows at .7594, followed by .7548. Beneath the latter is needed to aim at trendline, 55-day average and price support at .7530/.7500. We would expect fresh buying to show here but below it can see weakness extend for .7477, ahead of .7415/10.
Immediate resistance moves to .7691 which needs to cap to maintain the immediate downside bias. Above can ease the downside risk for a move back towards .7767/75," CS adds.
In line with this view, CS maintains a short AUD/USD position* from .7660, with a stop at .7695, and a target at .7520.
*This trade is recorded and tracked in eFXplus Orders.
'This content has been provided under specific arrangement with eFXnews.'
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