EUR/USD has certainly enjoyed a correction and some suspect this is a change of course, as fundamentals are improving in the euro-zone and deteriorating in the US.
What does technical analysis say? The team at Goldman Sachs analyzes and marks the next targets:
Here is their view, courtesy of eFXnews:
EUR/USD price action as of late suggests that it’s likely in the process of developing a zigzag correction within which it is now starting the C leg of an ABC (higher), says Goldman Sachs.
The validity of this argument, according to GS, has been confirmed with the ongoing break above 1.0923 and 1.0972 (61.8% and 76.4% retrace from the Mar. 26th high).
“The C leg would in turn extend through the 1.1053-1.1062 highs. Possible extension targets stand at 1.1168 and 1.1308 (76.4% and 100% from the Mar. 15th low). A zigzag ABC is a corrective move, therefore once complete will often result in a continuation of the preceding (down)trend,” GS projects.
So, where could be the first signs of topping from here? GS points to 1.1052-1.1134 which looks like ‘important’ resistance.
“This level includes three significant pivots. 1-) It includes the interim high (bearish key day reversal) from Mar. 26th , the interim low from Jan. 26th and the 55- dma. 2) The 55-dma in particular is historically relevant. It held two previous retracements in July and December (the top of waves 2 and iv of 3). 3) It’s also been above price action throughout the entire course of the decline since the May ’14 peak. In other words, 1.1052-1.1134 should act as very important resistance,” GS clarifies.
Bigger picture, GS still targets the long-term target down at 1.0286-1.0103.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.
Share
