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EUR/USD managed to rise above 1.17 on Tuesday and Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, believes the pair is executing a return to point of break out. The upmove should fade at the 1.18 downtrend and a fall to the 1.1495 is likely. 

Key quotes

“EUR/USD is seeing a small rebound. We suspect that it is executing a return to point of break out from a top. In which case we should see the rally struggle 1.1755/67 and remain contained by the short-term downtrend at 1.1800. We should then see renewed weakness towards 1.1523, the 38.2% retracement and then the March high at 1.1495 (this is also the measurement down from the top).”

“There is an outside chance that losses could extend to the 200-day ma at 1.1245, but that is not our favoured scenario.”

“The short-term downtrend guards 1.1870/1.1971 and only above here will re-target the 1.2014/15 region.”