FXStreet (Bali) - According to JPM FX Strategists, given the fairly impulsive structure of the decline from 1.3993 to 1.3503 in EUR/USD, there is a high likelihood that the broader up-trend has been reversed.

Key Quotes

"Given the fairly impulsive structure of the decline from 1.3993 to 1.3503 we see a high likelihood that the broader up-trend has been reversed. The final certainty for this view would however only be given on a break below 1.3497/77 (weekly trend/2014 low), which means the market has kept a backdoor open to potentially still extend it into the next major resistance zone between 1.4196 (monthly Ichimoku-lagging) and 1.4259/83 (int. 76.4 %/pivot)."

"Only a break above weekly trend line resistance at 1.4500 would constitute another scale jump in favor of another extension to massive resistance between 1.4944 (2011 high) and 1.5057/1.5147 (76.4 %/2009 high). A break below 1.3477 would on the other hand rip the downside wide open for a straight extension towards 1.3295 (pivot) and the next major support zone between 1.3104 and 1.3047 (pivot/int. 76.4 %) which look like interim targets only within a new, long-term downtrend."

"In the short-run we are looking for a range breakout between 1.3557 and 1.3671 (minor 76.4 % retracements) as such breaks would deliver an early indication whether 1.3477 (2014 low) or 1.3877 (int. 76.4 % on higher scale) will be tested next. These are the boundaries of the outer range and would have much stronger implications once taken out."

"Given the impulsive nature of the first initial decline from 1.3993 to 1.3503 though, we see a high probability that the market will fail to break decisively above 1.3877. If so we’d conclusively expect a straight test and most likely break below 1.3477 which would ultimately target 1.2897 (weekly trend) and 1.2502 (76.4 5 on big scale)."

Related Articles
  1. Forex Education

    Four Currencies Under the Spotlight in 2016

    With currencies having become the “tail that wags the dog,” in terms of their impact on the global economy, these four currencies will be under the spotlight in 2016.
  2. Forex Fundamentals

    These Currencies Are The Biggest Losers Of The Stock Downturn

    Here’s a list of the hardest-hit currencies amid the global stock market mayhem.
  3. Forex Strategies

    Will the Euro Continue to Rally? (EUO)

    The euro is rallying. Should investors chase this performance or is the real opportunity on the other side of the trade?
  4. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  5. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  6. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  7. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  8. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  9. Investing

    Financial News Comparison: Bloomberg Vs. Reuters (BAC, GOOG)

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  10. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
Trading Center