Last week EUR/USD formed a key day and week reversal and dropped through the eleven month support line at 1.3806 and both reversals point to a change in the major long term EUR/USD trend, notes Commerzbank.“The currency pair has now slid through the 1.3690/43 seven month uptrend line, April low and end of February low to 1.3648 before stabilising. Below it lie the 200 day moving average at 1.3626 and the 2012-2014 uptrend at 1.3382,” CB projects.
“Short term rallies are expected to find resistance between the 1.3740 January high and the 1.3770 late April low. Further resistance comes in along the breached support line, now resistance line, at 1.3811,” CB adds.
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.
