After 6 trading days sitting below the 1.3805/78.6% retracement, EUR/USD has finally started to sell off, says Commerzbank.
“Near term support at 1.3685 (Fridays low) has been eroded for losses to the 55 day ma at 1.3658, rebounds from here are considered to be temporary and likely to terminate at 1.3710/15,” CB notes.
“We look for a slide back to the 1.3562, 12th February low and then the 1.352 6 3 month support line,” CB projects.
“The resistance at 1.3774/1.3805 is regarded as the last defence for the 1.3894 December high. Note the 2008-2014 downtrend is located 1.3833. This is tough overhead resistance for the market and we will expect to see signs of failure very shortly,” CB adds.
In line with this view, CB maintains a short EUR/USD position as a trade recommendation from 1.3760, tightening the stop from 1.3835 to 1.3775, and leaving the target at 1.3575
