Although EUR/USD is now attempting to extend the rebound further north of the 1.1200 level there is scope for further weakness yet to the 38.2% retracement of the entire rally from March at 1.1122, which is set to hold, according to analysts at Credit Suisse.
Key quotes
“EUR/USD weakness has extended to just shy of next flagged support at 1.1160/54 – the 38.2% retracement of the rally from late April. Although this is holding for now, our ‘ideal’ roadmap remains for weakness to extend a touch further below here to test the 38.2% retracement of the entire rally from March at 1.1122. We would then look for a more important low to be found here for a fresh attempt to resume what we believe remains a more significant uptrend. Should weakness directly extend we would see the next meaningful support at the 50% retracement and rising 200-day average at 1.1035/28.”
“Near-term resistance remains at the 13-day average at 1.1225. Above 1.1255/65 would increase the risk a low may already be in place to reassert a bullish bias for strength back to 1.1339 then a retest of key resistance from the medium-term downtrend and 38.2% retracement of the 2018/2020 fall at 1.1348/69.”
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