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The US Dollar upside correction is gaining traction with the EUR/USD pair falling below the 1.22 level. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects losses to the 1.2130 and a potential test of the September high of 1.2014.

Key quotes

“EUR/USD last week saw a divergence of daily RSI – this reflected a loss of upside momentum and, near-term, the market is downside corrective.” 

“The pair has eroded the near-term uptrend, and we look for losses to the 1.2130 21st December low and potentially 1.2014 the September high and even the 1.1915 uptrend.”

“Intraday rallies should struggle around 1.2250.” 

“On a medium-term view, the market continues to track higher whilst targeting the 1.2556 2018 high and 1.2624, the 200-month moving average, which remains our longer-term target.” 

“Above 1.2350 we will have no choice but to just go with it.”