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EUR/USD weakness has extended for a test and hold of the 1.1612 September low, which economists at Credit Suisse think is likely to remain intact into the US election.

Key quotes

“EUR/USD weakness has extended to just shy of the 1.1612 September low and we suspect this holds for now ahead of the US election for a rebound. With a top still in place following the break of support at 1.1701 though strength will stay seen as temporary ahead of a break below 1.1612 in due course with support then seen next at the 50% retracement of the rally from late June at 1.1590 and eventually what should be more important support at 1.1495/85 – the March high and 38.2% retracement of the entire 2020 rally – which we look to prove a solid floor for a resumption of the core uptrend. Should weakness extend, which is not our base case, this would warn of a more damaging reversal lower with support seen next at 1.1425/23.” 

“Resistance moves to 1.1705 initially, with 1.1717/21 now ideally capping to keep the immediate risk lower. Above can see a retest of 1.1786/96, but with fresh sellers expected to show here.”