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EUR/USD extends its fall from trend channel resistance from late July at 1.2011 and the spotlight turns to the lower end of the channel and key price support at 1.1786/54. Failure to hold here would mark a top and a more important turn lower with support then seen next and initially at 1.1699, according to Credit Suisse.

Key quotes

“EUR/USD extends its aggressive rejection of trend resistance from late July at 1.2011 and the spotlight to the lower end of the uptrend channel from late July, currently seen at 1.1786. With key price support from the recent lows seen just below at 1.1764/54, we would look for an attempt to find a floor here at first.”

“With a potential momentum top in place and a bearish divergence  the risk for a top is seen increasing and below 1.1754 can confirm a top to open the door to a more concerted move lower with support seen next at 1.1699/89 – the August low and 38.2% retracement of the rally from late June – then what we look to be better support from the 55-day average and 50% retracement at 1.1598/90.”

“Immediate resistance moves to 1.1859, above which is needed to ease the immediate downside bias with resistance then seen next at 1.1878, then 1.1913. Above 1.1930 is needed to suggest the correction is over for a resumption of the uptrend and a move back to 1.2011 and eventually 1.2145/55.”

 

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