EUR/USD: levels to watch
Analysts at ANZ point out that EUR/USD is in the period of prolonged consolidation off 2008’s high ($1.6040) and euro’s rebounds are regarded as corrective. Still, the current outlook is considered cautiously bullish “until there is a clearer sign that the gains are near to completion”.
“The potential test of the $1.3950/1.4000 area and the possibility of extending towards $1.45 are highlighted in the weekly chart. It also highlights that dips need to remain above $1.3575 (ideally $1.3635) to avoid a return to the former bias of a slide back to $1.27,” ANZ projects.
Commerzbank also argues that a break below the uptrend at $1.3586 is needed to reduce upside pressure, while a break above $1.3833 will bring the bulls “formidable resistance” to $1.3940/60 (50% retracement of the move down from 2008 and the 5 year resistance line) where they will likely fell.
JP Morgan is now looking for confirming breaks like a break below $1.3702 (minor 38.2 %) in EUR/USD and equivalent above 80.68 (daily trend) in the USD Index. As long as euro stays above this level, it will have chance to make another attempt to test massive resistance between $1.3887 and $1.3945 (monthly Ichimoku lagging/monthly triangle).
Chart. H4 EUR/USD