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The US Dollar continues to recover as the EUR/USD pair has eroded the 1.2042 uptrend. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that the world’s most popular currency pair now heads to the 1.1945 level.

Key quotes

“EUR/USD has eroded the 1.2042 uptrend and focus has dropped to the September high at 1.2014. This is now exposed – it guards key short term support, which lies at 1.1945, this is the 23.6% retracement of the move up since March 2020.” 

“A close below 1.1945 is needed to imply a deeper sell off to 1.1750 and possibly the 1.1695/02 support, this is the 38.2% retracement and the September and November lows. It would also represent a return to point of break out from the previous 12-year downtrend.” 

“Rallies will now find initial resistance at 1.2085/1.2135 ahead of 1.2243, last weeks high.”

 

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