The EUR / USD lost traction and fell below the 1.22 level. Credit Suisse economists see room for further weakness and a possible test of the 38.2% retracement of the November / January rally at 1.2065.
Key statements:
“EUR / USD is extending its rejection of our long-term ‘measured base target’ at 1.2355 and with the momentum of the RSI maintaining a triple bearish divergence and with the USD bouncing from major support and our next core target, we continue to seek a consolidation phase to emerge.”
Below the price support at 1.2208 has been a complete minor top with support seen below at 1.2129 / 22. While a rally should be allowed at first from here, our bias points to a breakout in due course and a deeper pullback to 1.2065 / 59, the December low and the 38.2% retracement of the November / January rally, where then we are looking for an attempt to find a flat. “
“Resistance is initially seen at 1.2231, with a break above 1.2285 needed to ease the immediate bearish bias for a retest at 1.2345.55. Beyond there we can reassert the central uptrend with resistance seen below at 1.2414, then ahead of 1.2477 and then our central target from last July at 1.2518 / 98 ”.
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