EUR/USD: Scope for a deeper rebound, but strength still viewed as corrective – Credit Suisse

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EUR/USD is seen at risk of a near-term rebound. Nonetheless, strength is still viewed as corrective ahead of a move to 1.1495/93 in due course, economists at Credit Suisse report.

Resistance moves to 1.1614, then 1.1663/71

“The strong rebound has seen a minor base complete and with a bullish RSI momentum divergence also in place we see scope for a corrective move higher. Saying this, a close above the 13-day exponential average and price resistance at 1.1602/14 is needed to add weight to this view with resistance then seen at 1.1641 ahead of the 38.2% retracement of the September/October fall and price resistance at 1.1663/71.”

“Our bias would be for a fresh cap at 1.1663/71 and a resumption of the core downtrend. Above 1.1671 can see a deeper recovery to 1.1695, potentially the 55-day average at 1.1733.” 

“Failure to clear 1.1614 will leave the recovery in doubt with support seen at 1.1566 initially, with a break below 1.1529/24 curtailing thoughts of a rebound for a fall to our first objective at 1.1495/93 – the key March 2020 ‘point-of-breakout’ high and the 50% retracement of the rally from the 2020 low.”