EUR/USD: Failure to hold 1.1160 could result in test of 1.0840 – SocGen

The EUR/USD pair has returned near 1.1160. Although the euro may see a minor recovery in the near-term, economists at Société Générale expect EUR/USD to nosedive towards 1.0840 on a break below 1.1160.

Break above 1.17 needed to denote a potential trend reversal

“An initial bounce is taking shape; however, signals of a trend reversal are still not visible.”

“The descending trend line at 1.1525/1.1600 should be a short-term resistance level. The pair has to establish itself back above graphical resistance of 1.1700, which consists of the low from last March and the October peak, to denote a potential trend reversal.”

“If the pair fails to form a base at current levels and the downtrend continues beyond 1.1160, the next potential objective is 1.1040, the 76.4% retracement from 2020, and perhaps even 1.0840.”