EUR/USD has dropped to a recent 1.1845 low. As Benjamin Wong, Strategist at DBS Bank, EUR bears remain in charge, with trendline support at 1.1765 the first focus.
Bears remain in charge
“The market now has to watch the 22 July European Central Bank (ECB) policy meeting in conjunction with the FOMC, which follows a week later on 29 July, for tapering cues. On balance, relative hawkishness from the Federal Reserve should lever over the ECB, and further pressurise EUR lower as we run into the 26-28 August Jackson Hole Symposium. The trendline support at 1.1765 is the first line of support that we would look at.”
“There is the girth of a 1.1883-1.1493 support band, where there is scope for EUR to drop into this zone before staging a fightback as the technical indicators are stretched and do not flag a waterfall decline of a mega proportion.”
“Expect the 100-month moving average marker at 1.1782 and trend support at 1.1765 to get a test. Do not rule out extending the decline from 1.2349-1.2266 to probe Fibonacci markers at 1.1692, 1.1619.”
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