EUR/USD is trading below 1.16 key support. That should be attractive for momentum players, and economists at TD Securities reckon the near-term bias is to the downside with 1.15 the next key level.
“For EUR/USD, the breach of 1.16 represents a key technical pivot. We noted that this is neckline support of a soft-from head and shoulders pattern from the summer 2020 melt-up.”
“The ECB has clear calendar limitations to policy sequencing. If it wants to show fidelity to its Strategy Review, it must finish PEPP and APP first before it can even hike. Meanwhile, the Fed has already signaled it will move on taper.”
“Given the real yield outlook, we reckon that the break of 1.16 will be significant for momentum players. Next support comes in at 1.15.”