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“It has been a week since EUR/USD broke through the neckline of the head and shoulders pattern at the top of the bull run that began back at the end of 2016,” Rabobank analysts note.

Key quotes

“From a purely technical perspective, that provides a target of 1.05 which lines up with the January 2017 low. A move of that extent is not our base case scenario even though we are forecasting EUR/USD to trend lower on a 12mth basis. Returning to the near term, the pair have been showing signs of trend exhaustion since the break and the pair was unable to push through the 1.13 handle with the low on Wednesday just one pip higher.”

“We could see a close back above 1.14 this week, following the high of 1.1419 seen overnight. That said, 1.15 is still a long way off and we would view any short-term move higher as a chance to sell on rallies.”