20 Nov 2013
Flash: EUR/USD, can’t exclude stronger 2nd wave rally to target 1.3706 - JPM
FXstreet.com (Barcelona) - While Thomas Anthonj, FX Strategist at JP Morgan, favors a major trend reversal - still needs to be confirmed - in EUR/USD, the short term prospects are for a potential extension towards 1.3706.
Key Quotes
"The sell-off of the last 2 weeks in EUR/USD has certainly put the odds in favor of a major trend reversal so that an extension higher to 1.3870, to 1.3977 and to 1.4259/83 (monthly Ichimoku-lagging/monthly trend/int. 76.4 %/pivot) has become unlikely."
"The latter can however not be completely excluded as long as key-support between 1.3276 and 1.3217 (int. 76.4 %/200 DMA) has not been broken. Below the latter though, we’d see the B-wave top at 1.3833 as confirmed which would challenge 1.3104 and 1.3009 (pivot/76.4 % on higher scale) next."
"Overall though, we expect breaks below weekly trend line supports between 1.3012 and 1.2804 in the first quarter of 2014 to then challenge the key-T-junction on big scale at 1.2465 (76.4 %)."
"In the short-run though, we can’t exclude a stronger 2nd wave rally to unfold which would target 1.3706 (minor 76.4 %) once 1.3495/1.3510 (minor 76.4 %/daily breakout line) and 1.3548 (pivot) would be taken out. Only a decisive break above 1.3706 would start questioning our bear view whereas a break below pivotal support at 1.3389 would provide fresh support for it."
Key Quotes
"The sell-off of the last 2 weeks in EUR/USD has certainly put the odds in favor of a major trend reversal so that an extension higher to 1.3870, to 1.3977 and to 1.4259/83 (monthly Ichimoku-lagging/monthly trend/int. 76.4 %/pivot) has become unlikely."
"The latter can however not be completely excluded as long as key-support between 1.3276 and 1.3217 (int. 76.4 %/200 DMA) has not been broken. Below the latter though, we’d see the B-wave top at 1.3833 as confirmed which would challenge 1.3104 and 1.3009 (pivot/76.4 % on higher scale) next."
"Overall though, we expect breaks below weekly trend line supports between 1.3012 and 1.2804 in the first quarter of 2014 to then challenge the key-T-junction on big scale at 1.2465 (76.4 %)."
"In the short-run though, we can’t exclude a stronger 2nd wave rally to unfold which would target 1.3706 (minor 76.4 %) once 1.3495/1.3510 (minor 76.4 %/daily breakout line) and 1.3548 (pivot) would be taken out. Only a decisive break above 1.3706 would start questioning our bear view whereas a break below pivotal support at 1.3389 would provide fresh support for it."