EUR/USD is reacting to every headline regarding Greece and seems to be looking for a direction. The team at Citi examine the charts and see a clear direction: down.
Here is the rationale and the targets:
Here is their view, courtesy of eFXnews:
On long-term charts, EUR/USD remains below the 200 month moving average, which was an important break lower at the end of last year, notes CitiFX.
“This moving average had held on three occasion over the past decade – 2005, 2010 and 2012. The 2005 low of 1.1640 has also given way on a monthly close basis and is now the first level of resistance, followed by 1.1877,” Citi adds.
“Overall the downtrend is likely to send the pair towards parity, with decent levels coming in the 1.03-1.0430 area including the long term trendline support which converges with horizontal levels,” Citi projects.
Even the shorter term charts, according to Citi, are warning us that the recent consolidation may be approaching an end.
“We posted a doji pattern at the lows this week and are starting to move back up. It appears the correction / consolidation since the high on January 16th has come to an end,” Citi argues.
In line with this view, Citi maintains 2 short EUR/USD positions from early this month.
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