21 Jul 2015
EUR/USD: Odds of downtrend resumption improved significantly - JPMorgan
FXStreet (Bali) - John Normand and Thomas Anthonj, FX Strategists at JP Morgan Securities, note that the odds in favor of a straight resumption of the long-term downtrend in EUR/USD improved significantly lately.
Key Quotes
"The latest break below key-support at 1.0962/55 (minor 76.4 %/pivot) has once again increased the risk of having resumed the long-term downtrend. For the latter to be confirmed, it however takes a break below the key-T-zone between 1.0815 (May low) and 1.0744/25 (int. 76.4 %/daily trend)."
"As long as the latter is defended we might have just performed a broader countertrend decline (wave B) from the 1.1468 May high, which would keep the door for a broader C wave up to 1.1699/1.1811/76 (int. 38.2 % on higher scales/2010 low) open."
"A break and daily close (10pm CET) below 1.0725 would on the other hand re-open the downside for a straight re-test of previous lows at 1.0521 and 1.0462 with a high likelihood to extend to 1.0379 (minor wave 3 projection) if not to 1.0072 (76.4 % of the 2000-2008 rally)."
"A decisive break below the latter would even bring wave 3 projections on higher scale at 0.9652 and at 0.9298 into focus."
"In the short-run we stay on alert for any signs of trend exhaustion as the market has already come fairly close to the countertrend rally target between 1.0815 and 1.0744/25.Above the latter the bounce risk remains high, but unless 1.1001 (minor 38.2 %) and a downward sloping daily trend line (at 1.1182 today) are taken out, we see the bears in control."
"Above 1.1182 though, the probability of having already marked a countertrend B-wave low would rise significantly, which would however require breaks above 1.1136 and ultimately above 1.1305 (int. 76.4 % retracements on 2 scales) to be confirmed."
"Only such breaks would bring 1.1699 and 1.1811 (int. 38.2 % on highest scale) back into focus, whereas a break below 1.0725 would hand over full control to the bears who are aiming at extensions to 1.0379 and 1.0072 next."
Key Quotes
"The latest break below key-support at 1.0962/55 (minor 76.4 %/pivot) has once again increased the risk of having resumed the long-term downtrend. For the latter to be confirmed, it however takes a break below the key-T-zone between 1.0815 (May low) and 1.0744/25 (int. 76.4 %/daily trend)."
"As long as the latter is defended we might have just performed a broader countertrend decline (wave B) from the 1.1468 May high, which would keep the door for a broader C wave up to 1.1699/1.1811/76 (int. 38.2 % on higher scales/2010 low) open."
"A break and daily close (10pm CET) below 1.0725 would on the other hand re-open the downside for a straight re-test of previous lows at 1.0521 and 1.0462 with a high likelihood to extend to 1.0379 (minor wave 3 projection) if not to 1.0072 (76.4 % of the 2000-2008 rally)."
"A decisive break below the latter would even bring wave 3 projections on higher scale at 0.9652 and at 0.9298 into focus."
"In the short-run we stay on alert for any signs of trend exhaustion as the market has already come fairly close to the countertrend rally target between 1.0815 and 1.0744/25.Above the latter the bounce risk remains high, but unless 1.1001 (minor 38.2 %) and a downward sloping daily trend line (at 1.1182 today) are taken out, we see the bears in control."
"Above 1.1182 though, the probability of having already marked a countertrend B-wave low would rise significantly, which would however require breaks above 1.1136 and ultimately above 1.1305 (int. 76.4 % retracements on 2 scales) to be confirmed."
"Only such breaks would bring 1.1699 and 1.1811 (int. 38.2 % on highest scale) back into focus, whereas a break below 1.0725 would hand over full control to the bears who are aiming at extensions to 1.0379 and 1.0072 next."