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EUR/USD managed to stage a recovery, mostly thanks to the weakness of the US dollar.

And now, the team at Credit Suisse explains the case for going long on EUR/USD, citing the bull wedge:

Here is their view, courtesy of eFXnews:

While Credit Suisse remains long-term bulls of the USD, they are seeing several key targets hit, momentum divergences and DeMark exhaustion signals emerge.

We are alert to a correction, and indeed, a potentially aggressive retracement,” CS projects.

“For EURUSD, our core target of 1.2227/1.2042 has all but been achieved – the lower end of the nine-year range and key low from 2012. While we think a larger top pattern is building and a break below will eventually be seen, near term, we suspect this again holds for now and a retracement higher emerges,” CS argues.

EURUSD monthly chart euro dollar bull wedge for going long

Key near-term resistance is placed at 1.2457, above which would see a base and bull “wedge” complete, for a rally to 1.2560/1.2600 – the 55-day average and November high. Although we would expect buyers here, we think there is a real risk this too could be overtaken, which if seen, would suggest strength could extend all the way back to 1.2888/1.2914 – the 38.2% retracement of the entire 2014 collapse. We would look for a fresh top here.,” CS projects.

Bigger picture, CS thinks that once a correction has run its course would look for an attempt to remove 1.2042 to establish a major top, to target 1.0836/1.0765.

In line with this view, CS entered a fresh tactical EUR/USD  long today from 1.24, targeting a move to 1.284.  

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