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In opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair could extend the drop and test the 1.1510/08 band.

Key Quotes

EUR/USD is on the defensive following the recent failure at the 1.1790/1.1803 resistance area. We would allow for a near term pull back to approximately the 1.1550 region. This move is viewed as corrective only. There is scope for a deeper retracement to the 1.1510/08 key support. Provided this holds we will assume an overall upside bias and a retest of the 1.1790/1.1803 region”.

“We are awaiting a close above 1.1790 which should be enough to trigger a move to the 1.1853 mid-June high and the 1.1895 55 week ma. Directly above here lies the 200 day ma at 1.1942 and we would allow for some profit taking there. We continue to view the August low at 1.1301 as a significant turn for the market”.