Karen Jones, Head of FICC Technical Analysis at Commerzbank, sees the pair’s upside failing in levels just above the 1.1200 handle.
“The Euro has sold off to and bounced from the 1.1137 channel. Rallies should struggle to regain the 20 day ma at 1.1212 20 day ma and we look for failure here. Below 1.1137 channel should be enough to trigger losses to the 1.1070/23.6% retracement of the move higher this year and then the 55 day ma at 1.0978”.
“Rallies are likely to find initial resistance offered by the 20 day ma at 1.1212/35 and remain capped by 1.1300”.
“Above 1.1300, the market has potential to reach the highs from mid 2016 circa 1.1429 and the two year resistance line at 1.1472, however we believe it will struggle here from a longer term perspective. We note the 78.6% retracement lies at 1.1343”.
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