EUR/USD risks further downside near term – Commerzbank

According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair could resume its downside in the short term.

Key Quotes

“EUR/USD has spent the past 2 weeks holding sideways to higher. We view this correction as now ending, the intraday Elliott wave has turned negative and we look for further weakness this week”.

“The previous channel – now located at 1.1220, is acting as nearby resistance and maintains our negative bias. It leaves the market eyeing 1.0821, the March low, and then the 31 year support line at 1.0642. Note the 1.0457 March 2015 low is also found in this vicinity together with the 1.0574 channel”.

“Initial resistance is the channel at 1.1220 and we look for the market to fail here. Above here lies 1.1231 the 61.8% retracement of the post Brexit move”.