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Karen Jones, analyst at Commerzbank, suggests that EUR/USD has sold off to the base of the weekly channel at 1.0905, but the new low of 1.0904 has not been confirmed by the daily RSI and we have 13 counts on the daily and weekly charts.

Key Quotes

“Extreme caution is warranted. Failure at the base of the one year down channel at 1.0905 would put the January 2017 low at 1.0829 and the 78.6% Fibonacci retracement of the 2017-2018 advance at 1.0814 on the map. The topside remains capped by the three month resistance line at 1.1063, and will stay offered below here.”

“Only a daily chart close above the August 26 high at 1.1164 would confirm a bottoming formation and put the 200 day ma at 1.1244 back on the cards. For now the market is on the defensive.”