Continued failure at the 1.4518/00 resistance zone keeps the bias lower, through 1.4355 and 1.4259 initial support levels to the 1.4055 range low and then the 200-day moving average, currently placed at 1.3978.
EUR/USD has failed once again ahead of the critical 1.4518/37/79 resistance cluster as the market holds below Tuesday’s peak at 1.4500. While the critical cluster of resistance between 1.4518/37/79 continues to cap, we envisage a test and eventual breakdown through 1.4355 near-term trendline support, and for the market to target 1.4259 support initially. Looking further out we expect the market to extend through the latter support level to the broader medium-term range low at 1.4055 and the 200-day moving average, which currently lies at 1.3978.
Only through 1.4518/37/79 allows for a push higher to the 78.6% Fibonacci retracement/chart resistance zone at 1.4698/1.4707. Above here then sees a re-test of the 1.4944 peak.
Strategy: Sell through 1.4410 targeting 1.4010, stop placed at 1.4590.
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Credit Suisse
FIXED INCOME RESEARCH & ANALYTICS