Via eFX:
Yesterday’s break above 1.2546 (minor 76.4 %) in EUR/USD didn’t trigger much follow-up yet, but increased the risk of running into a broader short-covering rally, notes JP Morgan.
- “The defense of 1.2441 (minor 76.4 %) and yesterday’s break above 1.2546 (minor 76.4 %) have increased the risk of running into a broader recovery to 1.2871/88 (int. 38.2 %/pivot) a little more,” JPM projects.
- In order to receive confirming evidence for such a short covering rally, according to JPM, it would take additional breaks above 1.2584 and 1.2614 (daily trend/pivot).
- “A failure to clear these would still leave the market at risk of extending the broader downtrend straight away to 1.2318/1.2260 (Fib’s) and to1.2223 (weekly trend),” JPM argues.
For cable, JPM notes that it’s already testing first resistance cluster at 1.5726/38 (minor 38.2 %/pivot).
- Such a break, according to JPM, would finally pave the way for a test of the more significant resistance barriers at 1.5818/34 and at 1.5947 (int. 38.2 % on higher scales) where the upside looks capped though.
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