EUR/USD has extended its decline in its broader “triangular” range to weigh on the May low and 61.8% retracement support at 1.0819, notes Credit Suisse.
"This is holding for now, and we allow for a potential bounce from here. However, we look for an eventual breakdown to test trendline support, now at 1.7041. We would expect a bounce here, but beneath it can trigger a move down to 1.0660," CS projects.
"A move below 1.0660 should be sufficient to confirm a bear "triangle" has been finally established for the March 2015 low at 1.0458, and eventually our 1.01/.99 target," CS argues.
"Near-term resistance shows at 1.0962/66, above which can see a move back to 1.1035, with 1.1083/89 expected to cap," CS adds.
In line with this view, CS runs a limit order to sell EUR/USD at 1.0962, with a stop at 1.1036 and a target at 1.0745.
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