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Short-term US Dollar strength is viewed as corrective and though RSI did not confirm the new 1.1422 high on the EUR/USD chart, Commerzbank’s Karen Jones expects the pair to retest the 1.1495 March peak. UOB, however, sees the 1.142 top as legitimate.

Key quotes of Commerzbank

“EUR/USD charted a new high at 1.1422 but this was accompanied by a divergence of the daily RSI and coupled with a 13 count on the 240-minute chart, this implies some consolidation near-term.” 

“For now, while EUR/USD holds over the 1.1240/1.1170 December 2019 high and 38.2% retracement, scope remains to retest of the 1.1495 March peak. Above here will target 1.1570, the 2019 high, then 1.1815/22, the 61.8% retracement of the move down from the 2018 peak and the 1.1862 2008-2020 resistance line.”

“Below 1.1172, the 38.2% retracement would allow for 1.1068 the 6-week support line, but we would look for the market to hold down here.”

 

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