Since the Greek elections, EUR/USD is in recovery mode, moving up and holding on to gain. The big question if this is just a correction or a change of course is answered by Bank of America Merrill Lynch: it’s in a topping zone that could lead to a resumption of the big downfall.
Also the Canadian dollar has been a big mover, and here the team sees a continued correction:
Here is their view, courtesy of eFXnews:
Evidence says that the EUR/USD correction from Jan-25 is entering a topping zone before it resumes its underlying downtrend, says Bank of America Merrill Lynch.
“Below trendline support at 1.1317 confirms (we target 1.0765 and potentially below),” BofA projects.
“A break of 1.1534 points to a larger correction than anticipated, but bulls need a break of 1.1679 to damage the larger downtrend, not before,” BofA adds.
Meanwhile BofA thinks that evidence says the USD/CAD correction is not yet complete,
“We look for another leg lower to YTD channel support at 1.2137 before greater signs of a base emerge,” BofA projects.
“Big Picture,. The l/term bull trend remains for 1.3465,” BofA adds.
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