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The US dollar is consolidating and Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the EUR/USD pair to extend its downward correction.

Break of the uptrend not sustained

“EUR/USD finally cracked below the uptrend on Friday and the rest of our long positions were profit stopped.”

“Interestingly, the pair has seen a smart bounce off the 23.6% retracement at 1.2133. Is the correction already over? We suspect not and there is scope for a slightly deeper retracement to 1.2080/50.”

“We are unable to rule out a possible slide to the 1.1994/86 band of support (mid March highs and the 22nd April low).”

“Key support is 1.1865 (2020-2021 uptrend).”