The dramatic sell-off for EUR/USD continues post the FOMC as the market accelerates further following its conclusive break of its key 200-day average at 1.1996. The pair is set to see further weakness to support next at 1.1825/23, then the lower end of the converging range of the year, now at 1.175, as reported by Credit Suisse.
“Assuming we do not see a close back above the 200-DMA at 1.1196 today, which we do not look for, we look for further weakness within the broader range that has been in place all year. Indeed, support from the 61.8% retracement of the rally from late March has already been removed and we look for further weakness to 1.1867/60 next, then the 78.6% retracement at 1.1823. Whilst we would also look for this to hold at first, below can see weakness extend to potential trend support from the lower end of the converging range, now at 1.1758.”
“With major price and retracement support not far below at 1.1717/1.1695, we look for a fresh floor here.”
“Resistance moves to 1.1952 initially, then the 200-day average at 1.1996. Above 1.2007 remains needed to ease the immediate downside bias for a move back towards 1.2074, but with fresh sellers now expected ahead of here.”
