EUR/USD – Remains on the defensive and probing the 55 day ma

Karen Jones, Head of FICC Technical Analysis at Commerzbank shows a close below 1.1712 would open doors for the continuation of the recent drop. 

Key quotes

EUR/USD failed last week at the 78.6% retracement at 1.1976 and came under increasing downside pressure. The 55-day ma has been eroded But we have seen NO close below here (1.1760) and we may see a small rebound, this is indicated to fail circa 1.1810. A close below 1.1712 the recent low should be enough to negate upside pressure and allow for slippage back to the 1.1553 7th November low.

Where are we wrong? The Fibonacci retracement at 1.1976 is regarded as the last defense for the 1.2092 September high.

Short-term trend (1-3 weeks): Neutralised

Long-term trend (1-3 months): Neutral to positive it is possible that the move to 1.1553 as the end of an ‘a-b-c correction then the longer term risk is still on the topside.