EURUSD aims at 1.3909/00 with risk to 1.3655 target into July
An erratic end to last week, but primarily highlighted by a “head fake” through the top of “triangle” resistance on July 4th and probes below support to further enhance a defensive bias within the non-trend environment evident since mid-Q2. Moreover, a likely fifth successive day of lower lows and highs today has more significantly produced a forceful violation of the “triangle” support line. This activity, reinforced by breaches of interim chart support at 1.4103 and 1.4074 confirms an intermediate term top and points to further erosion into July.
Downside targets: Initially we target the confluence of 200-DMA/50% retrace support at 1.3909/00. The overshoot threat for the month, however, is still lower through the 1.3753 swing low to the 61.8% Fibonacci retracement of the 2001 rally at 1.3655.
Recovery challenges: Back above 1.4375 is needed to ease the immediate bearish tone; only back through 1.4579 opens up a more constructive bias for 1.4698/1.4735.
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Credit Suisse
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