EUR/USD is looking for a direction amid a dovish Draghi and a hesitant Federal Reserve.
What do the charts tell us? Here are views from two banks:
Here is their view, courtesy of eFXnews:
EUR/USD appears to be extending the phase of correction after it re-integrated within the triangle last week, notes SocGen.
“It has breached an upward trend support and is testing the 50% retracement of the recovery since March lows. It is noteworthy that it formed a shooting star last week and this break indicates possibility of further retracement,” SocGen adds.
“Weekly indicator sustains below 50% graphical level while daily RSI has breached an upward trend which highlights test of triangle lower limit at 1.0940/1.08 is likely. This remains a decisive level for revisit of 1.05/1.04, the multi decadal channel support,” SocGen projects.
Turning to Credit Suisse, their technical strategy team sees an attractive selling opportunity around the current levels at the 61.8% retracement of the July/August uptrend at 1.1155/51 targeting the the mid-August low and 78.6% retracement of the July/August rally at 1.1017/00.
“We would look for buying to show here but a direct break can see a further retreat for 1.0874 and then 1.0819/09,” CS argues.
“Immediate resistance shows at 1.1205, followed by 1.1245/53. Above is needed to target 1.1332/65 where we would expect fresh sellers,” CS adds.
CS opened a short EUR/USD from 1.1150 targeting 1.1020.
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