EUR/USD turned down after the announcement of the aGreekment. And what’s next?
The team at Citi looks at the charts:
Here is their view, courtesy of eFXnews:
After the low in EUR/USD was posted at 1.0458 in March of this year we have seen a move higher that has looked corrective in nature (Much slower rally than the fall) and characterized by the classic dynamic of higher highs and higher lows, notes CitiFX.
“The failure to set a new high on 18 June (1.1439 versus 1.1468 high on 15 May) raised the first question mark. Now, a close below 1.0819, if seen, would create a lower low and firmly suggest that the downtrend has resumed,” Citi adds.
In that eventuality, Citi thinks that the present pattern could then be identified as either:
“1- A head and shoulders formation with a neckline at 1.1124 and a downside target of at least 1.0370 (new trend lows).
2- An effective double top with a neckline at 1.0819 and a minimum target of 1.0185-1.0200,” Citi clarifies.
“While longer term (possibly summer 2016) we retain a target of .8800-.9000 we would envisage seeing the target rangers above in the weeks ahead if this break of 1.0819 takes place,” Citi projects.
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
