Commerzbank still sees scope for upside bias in EUR/USD

Technical Analysis

Author: Justin Low | eurusd

This comes despite the pair slipping back towards 1.1200 in overnight trading

EUR/USD D1 17-07
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The firm's technical analyst, Karen Jones, argues that attention has now switched back towards the March and mid-June lows around 1.1176-81 and as these levels hold the pair from falling further, an upside bias will prevail.

Adding that they see a recovery back towards the 200-day MA (blue line) and early June high of 1.1320-50. Should price work its way back towards there and above the June high of 1.1412, they see a further upside move towards a test of the 2019 high @ 1.1570.

The firm says that they view the April and May lows near the 1.1100 handle as a "turning point" and targets a move towards 1.1990 in the longer-term.

I wouldn't say that there's anything wrong with the technical picture/argument they're pointing out here but in my view, this has to be backed up by fundamentals down the road.

As such, the Fed and ECB will be major factors affecting the currency pair over the next two weeks and we'll only get a better idea on the outlook after i.e. how will yields perform and how dovish each respective central bank will be in the coming months.

Not to forget, there's also the threat of trade tensions between US and China escalating and I don't see how that will help the euro area economy and such sentiment will no doubt also weigh on the euro in the bigger picture.

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