EUR/USD to mark a near-term base on a break above resistance at 1.0620/42 – Credit Suisse

EUR/USD has declined to test and successfully hold key support from the 1.0341 low of 2017. In the view of economists at Credit Suisse, a corrective recovery is likely. 

Key resistance is seen at 1.0620/42

“With the market having closed above its 13-day exponential average and with daily MACD momentum holding a bullish divergence and having turned higher, we look for a recovery/consolidation phase to emerge.”

“Near-term resistance is seen at 1.0593/99, ahead of what we see as a more important test at the 23.6% retracement of the fall from February, accelerated downtrend and May high at 1.0620/42. Above here is needed to suggest a near-term base has been completed to provide the platform for a deeper recovery to the 38.2% retracement and mid-April lows at 1.0758/87. We expect a much tougher barrier here if tested.” 

“Support is seen at 1.04825 initially, with 1.0432/28 needing to hold to maintain an immediate upside bias. A break can clear the way for a retest of 1.0350/41.”