EUR/USD: Rebounds should struggle to sustain levels above mid-range – Westpac

Tim Riddell, Research Analyst at Westpac, notes that the 1.05 held in early March for EUR/USD pair which avoided downdraft risks, and has allowed for an early push into the central band of EUR/USD’s broad range (effectively 1.04-1.16).

Key Quotes

“Daily momentum is in extended areas but remains supportive. A push above 1.0980 (medium term 50%) appears likely before EUR retraces lower again.”

“Weekly

• Risk of a range-flip lower was negated by the close above 1.0650 and current rebounds could push into the upper half of the broad pennant like range
• Certain weekly momentum indicators have broken higher, but bias is for EUR/USD to struggle to sustain levels above 1.10 before sliding to retest range lows”

“Monthly

• EUR/USD continues to consolidate within a horizontal triangle/pennant. Such patterns normally precede a final leg lower to complete a long term trend
• Monthly momentum remains neutral, but is mildly supportive. Risk of an early base should not be ignored, but a downside range flip is still favoured”