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EUR/USD has reached a four-month support line at 1.1420. The pair seems to have gone into a consolidation phase above 1.1450 on Monday but Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects EUR/USD to resume its fall towards the 1.1366 mark.
Negative bias below the 1.1650 five-month downtrend
“EUR/USD sold off last week and has reached a 4-month support line at 1.1420, it is possible that this will hold the initial test and prompt a tiny bounce higher. This will have no impact on the chart while below the 1.1650 five-month downtrend.”
“There remains scope for the previous downtrend (from 2008) which is now located at 1.1366 and should act as strong support, we look for this to hold the initial test.”
“Below 1.1366 would target 1.1290 then 1.10, the 61.8% and 78.6% retracement of the move seen in 2020.”