Danske Research Team
Danske Bank A/S
This week, we present one technical view: sub 1.2042 to confirm a complex top for 1.1212/1.0071.
EUR/USD – sub 1.2042 to confirm a complex top for 1.1212/1.0071
- Summary summary – technically, sub 1.2042 to confirm a complex top for 1.1212 and 1.0071. Resistance comes in at 1.2602/1.2887.
EUR/USD is pressuring critical support and the target region set earlier in the year, following the completion of a top area and major rising wedge.
MACD and Stochastic studies continue to point lower and a break under the 2012 low at 1.2042 would confirm a major multi-year complex top area. This signals/projects very significant downside over coming weeks and months. This also corresponds to projections we have made on the USD basket. Sub 1.2042 opens initial objectives/levels at 1.1876 and 1.1640. These mark the 2010 and 2005 lows. Further weakness is then anticipated to 1.1212, the 61.8% retracement level of the major .8228-1.6040 October 2000 to April 2008 cycle. The complex top area, however, indicates scope is likely, below here, towards the 76.4% retracement level at 1.0071.
To neutralise the current and immediate bear structure, recent lower ceilings at 1.2602 and 1.2887 must be reclaimed.
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