EUR/USD is holding the 38.2% retracement of its November/January rally and 55-day average at 1.2065/54, and analysts at Credit Suisse look for this to hold for now. Meanwhile, resistance moves lower to 1.2134, then 1.2167.

Key quotes

“EUR/USD has sold-off sharply after confirming a small ‘head & shoulders’ top below price support at 1.2132/22 with weakness having already extended to our first downside objective at 1.2065/54 – the December low, 38.2% retracement of the November/January rally and rising 55-day average. We continue to look for an attempt to find a floor here for now and for a recovery to emerge with resistance seen at 1.2134 initially, then the 13-day average and price resistance at 1.2167/80, which we look to then cap.” 

“Above 1.2167/80, EUR/USD can see a deeper recovery to the ‘neckline’ to the top at 1.2223/31, but with this needing to be cleared to negate the top to suggest the corrective setback is coming to an end for a move back to the 1.2350/55 highs.” 

“Below 1.2054 on a closing basis, the pair can see support next at the September high at 1.2011 ahead of the 23.6% retracement of the entire 2020/2021 uptrend at 1.1945, with the ‘measured top objective’ at 1. 1924/14. We would then look for an attempt to establish a fresh and ideally important floor here.”