eFX with the notes from the technical strategy teams at SocGen and Credit Suisse
Some insights on EUR/USD setup and projected path in the near-term
SocGen: Descending Channel At 1.04 Key.
"After breaching the flag formation, EUR/USD is now closing in on
March lows near 1.0550/1.05. More importantly this is the multi decadal
upward channel support. Monthly RSI has retraced after testing a
horizontal resistance which suggests there is a possibility of further
downtrend towards monthly descending channel at 1.04. The ongoing
correction is retracing the 2000-2008 up move however a break below 1.04 will confirm that this is in fact a downtrend of a larger degree.
In such a scenario we can expect retracement of the whole up
cycle since the 1980s and first meaningful support will be at
1.00/0.9930 and next at graphical levels of 0.96/0.9530
consisting of 1989 lows, 2001 highs and a projection for the down move.
July lows of 1.08/1.0830 are likely to be an immediate resistance while
flag limit at 1.1270 will be an important hurdle," SocGen projects.
Credit Suisse: 13-Day MA At 1.0669 Key.
"EURUSD remains capped beneath its falling 13-day average, currently
at 1.0669, and is in the process of removing last week's low at 1.0566. This keeps us directly bearish to test the April low at 1.0521 next. We allow for a fresh bounce here, but expect follow through beneath it in due course to test the 1.0458 low for the year.
Bigger picture, we continue to look for weakness to extend to our long-held 1.0109/.9921 target zone.
We expect this to prove much stronger support. Resistance moves to
1.0605/11, with 1.0670/89 expected to cap to keep the trend directly
lower," CS projects.
