Danske Research Team
Danske Bank A/S
This week we present one technical view: EUR/USD – Rising wedge projects 1.0250
Summary – EUR/USD is consolidating before the next leg lower towards 1.0521/1.0457 and then 1.0250. Resistance at 1.0839/88 before 1.1036/52.
EUR/USD’s long-term trend and structure remain negative. Within this framework the market has recently completed a three-four week ascending wedge. An initial drop has been seen and a minor foothold/support has been found at 1.0521. Corrective activity and consolidation above here precedes the next leg/phase lower.
Long-term momentum remains negative and a loss of recent higher lows at 1.0624 and 1.0571 would confirm the outlook for weakness under 1.0521 to pressure the 15 March multi-year low at 1.0457. A loss here would then pivot the pair lower towards the projected target at 1.0250, the 1.0457 to 1.1037 up-swing projected down from the ascending wedge’s break point.
Above, resistance levels at 1.0839 and 1.0888 are likely to cap the topside. An upside break here, however, would extend the immediate phase towards 1.0915 and 1.0955, while only a break above congestive highs between 1.1036-1.1052 would question further near-term downside.
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