EUR/USD: Previous uptrend now offers resistance at 1.2040 – Commerzbank

EUR/USD dropped below 1.20 on Thursday and has failed to recapture that level. Beyond a small near-term rebound, analysts at Commerzbank look for deeper losses.

Key quotes

“EUR/USD has eroded the 1.2000 level and this has left attention on the downside. The next support is at 1.1945, which is the 23.6% retracement of the move up since March 2020.” 

“A move below 1.1945 will imply a deeper sell off to 1.1750 and possibly the 1.1695/02 support, this is the 38.2% retracement and the September and November lows. It would also represent a return to point of break out from the previous 12-year downtrend.” 

“The Elliott wave count on the daily chart is implying that the market is likely to fail on rallies to 1.2040/75. We also note 13 counts on the 60 and 240 minutes charts so we will attempt to sell the rally.”