EUR/USD: Scope for a substantial drop to the 1.1020/00 zone – Credit Suisse

EUR/USD looks to have finally confirmed its large “head & shoulders” top. The pair is expected to fall to 1.1495 initially and potentially 1.1020/00 over the long-term, economists at Credit Suisse report.

Close below 1.1703/1.1695 opens the door to a fall to 1.1495/93

“EUR/USD has seen a conclusive move below major support from its March low and 38.2% retracement of the entire 2020/2021 uptrend at 1.1703/1.1695. This finally marks a major top and important change of trend lower, opening the door to a fall to the March 2020 high and 50% retracement at 1.1495/93.” 

“Whilst we would expect 1.1495/93 to hold at first, and potentially for a while, the size of the top suggests an eventual break lower will be seen, with support seen next at 1.1290.”

“Whilst we would expect a fresh hold at 1.1290, we continue to see the broader risks skewed to the downside, with support seen next at 1.1020/00.”

“Resistance at 1.1756 now ideally caps, although only back above 1.1910 would be seen to negate the top.”