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EUR/USD has rallied strongly after completing a near-term base but analysts at Credit Suisse look for further strength to be capped at a cluster of resistance seen starting at 1.1764 and stretching up to its downtrend at 1.1804.

Key quotes

“EUR/USD has surged higher after completing a near-term base above 1.1688 and this already leaves the market approaching a cluster of what we look to be tougher resistances, stating at 1.1764 and stretching up to 1.1804 – the 55-day average, downtrend from the early September peak and 38.2% retracement of the September fall. We look for this to ideally cap to maintain the top and for the risk to turn lower again.” 

“Support is seen at 1.1709 initially, then 1.1693, with a break below 1.1665/61 needed to reassert a bearish tone again with support then seen next at 1.1642 ahead of the 1.1598 recent low, with 1.1495/85 still our ‘ideal’ objective.”

“Above 1.1804 would see the top negated to suggest the correction is already over and broader uptrend resumed with resistance seen next at 1.1827, then 1.1873/83, with 1.1918 needing to be cleared for a move back to the 1.2011 high.”