Last week EUR/USD formed a key day and week reversal and dropped through the eleven month support line a t 1.3797, notes Commerzbank.
“Both reversals point to a change in the major long term EUR/USD trend. The 1.3681/43 seven month uptrend line, April low and end of February low are thus in focus,” CB adds.
“Below here will see the 2012 -2014 uptrend at 1.3372 tested. Intraday rallies are expected to fin d resistance along the breached support line, now resistance line, at 1.37 97. Further resistance is found around the 1.3850 level and at the 1.3906 April 11 high below which EUR/USD should now remain,” CB projects.
In line with this view, CB holds a short EUR/USD as a trade recommendation from 1.3955 with a revised stop at cost, and a target at 1.35.
For GBP/USD, CB notes that was rejected by the 1.7000 mark and CB believes that a major top is in the process of being formed.
“The February high at 1.6822 and the March high at 1.6785 are still being targeted. Further down lie the 1.6763 April 23 low and the uptrend channel support line at 1.6704, both of which could also be reached in the days to come. Minor resistance comes in around the 1.6919 May 1 high,” CB projects.
In line with this view, CB maintains a short GBP/USD as a trade recommendation from 1.6904with a stop at 1.7050, and a target at 1.6725.
