Karen Jones, Analyst at Commerzbank, explains that the EUR/USD eroded its 20 day ma at 1.1364 on Friday, which leaves the market on the defensive and attention reverts to the 1.1300 August and October lows.
Key Quotes
“The market needs to overcome the current November high at 1.1500 to alleviate immediate downside pressure and allows for gains to 1.1581/1.1622 (2018 downtrend and 16th October high).”
“Support at 1.1300 guards 1.1216 the recent low. While the 1.1216 current November low holds the downside scope for recovery remains longer term, but waning downside risk has increased!”
“Where are we wrong? Below the 1.1216 current November low lies the 61.8% Fibonacci retracement of the 2017-18 advance at 1.1186. Failure there would put the late May and June 2017 lows at 1.1119/10 on the cards.”
“Short term trend (1-3 weeks): Two month downtrend channel eroded look for gains to 1.1500, 1.1625.”
“Long term trend (1-3 months): A rise above the recent high at 1.1625 would confirm a trend reversal and put the 55 week moving average at 1.1852 back on the cards.”
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