23 Jul 2013
Flash: EUR/USD faces risk for extension into 1.20/1.18 - JPMorgan
FXstreet.com (Barcelona) - The EUR/USD weekly chart displays a bearish formation, according to John Normand, Head, FX Strategy at J.P. Morgan, who sees the reversal from the June high consistent with a medium term bearish setup, with a break of the 1.28/1.2745 support area now needed to confirm 'the broad topping pattern.'
Key quotes
"The price action is consistent with the broad head and shoulders topping pattern below the February peak. In turn, the focus is now on the critical 1.28/1.2745 support area."
From a short term perspective, the July reversal from this zone can allow for additional consolidation with resistance near 1.3260 a likely cap. However, eventual downside breaks should be a catalyst for a more sustained bearish environment for EUR."
"Initial targets rest in the 1.2400/35 area (76.4% retracement from the July ’12 low) with a growing risk for an extension into the 1.20/1.18 medium term targets. Only a break back above the critical 1.3385/1.3500 resistance zone would question the current bearish risk."
Key quotes
"The price action is consistent with the broad head and shoulders topping pattern below the February peak. In turn, the focus is now on the critical 1.28/1.2745 support area."
From a short term perspective, the July reversal from this zone can allow for additional consolidation with resistance near 1.3260 a likely cap. However, eventual downside breaks should be a catalyst for a more sustained bearish environment for EUR."
"Initial targets rest in the 1.2400/35 area (76.4% retracement from the July ’12 low) with a growing risk for an extension into the 1.20/1.18 medium term targets. Only a break back above the critical 1.3385/1.3500 resistance zone would question the current bearish risk."