EUR/USD: Consolidation here – Commerzbank

According to Karen Jones, analyst at Commerzbank, EUR/USD has tested and so far failed at the 5 month downtrend at 1.1118 which is likely to provoke some consolidation.

Key Quotes

“The market recently did not close below the 1.0989 mid-November low and rallied sharply higher. Attention is on the topside and this down trend - this guards the 1.1180 October high and the 1.1249 channel resistance and eventually the 1.1359 200 week ma. This latter level remains the critical break point on the topside from a medium term perspective. Intraday dips are indicated to hold over 1.1050.”

“Failure at 1.0980 targets the 1.0943 78.6% retracement. This is seen as the last defence for the 1.0879 October low and the 1.0814 Fibo retracement, and if seen, we will look for signs of reversal from here.”