16 Jan 2014
Flash: EUR/USD downside wide open for a minimum decline into 1.3024 - JPMorgan
FXstreet.com (Bali) - In view of John Normand and Thomas Anthonj, FX Strategists at JP Morgan, the EUR/USD has recently shown signs of exhaustion, which has led them to conclude that the main risk is now to further deterioration in prices going forward.
Key Quotes
"Last month’s failure to clear key-resistance at 1.3912/18 (monthly trend/monthly Ichimoku-lagging) and the following break below the last low at 1.3625 provided strong evidence for the view that the countertrend rally from the mid 2012 low a 1.2042 has finally reached its exhaustion point at 1.3893."
"This leaves the downside wide open for a minimum decline into 1.3024 (minor 76.4 %) with a strong option to extend to 1.2479 (76.4 % on higher scale) once the former has been broken decisively."
"For this negative view to be confirmed it however takes additional breaks below 1.3495/68 (daily trend/daily Ichimoku-lagging), below 1.3436 (minor 76.4 %) and ultimately below 1.3335/1.3295 (200 DMA/last major low). Particularly above 1.3495/68 we can't exclude another attack on 1.3912/18 which if taken out would open additional but limited upside potential to 1.4259 (76.4 % on big scale)."
Key Quotes
"Last month’s failure to clear key-resistance at 1.3912/18 (monthly trend/monthly Ichimoku-lagging) and the following break below the last low at 1.3625 provided strong evidence for the view that the countertrend rally from the mid 2012 low a 1.2042 has finally reached its exhaustion point at 1.3893."
"This leaves the downside wide open for a minimum decline into 1.3024 (minor 76.4 %) with a strong option to extend to 1.2479 (76.4 % on higher scale) once the former has been broken decisively."
"For this negative view to be confirmed it however takes additional breaks below 1.3495/68 (daily trend/daily Ichimoku-lagging), below 1.3436 (minor 76.4 %) and ultimately below 1.3335/1.3295 (200 DMA/last major low). Particularly above 1.3495/68 we can't exclude another attack on 1.3912/18 which if taken out would open additional but limited upside potential to 1.4259 (76.4 % on big scale)."