FXStreet (Bali) - According to TDS FX Strategists, technical factors continue to suggest risks are geared towards a drop back to the upper 1.33 area.
"From a technical point of view, EURUSD retains a negative/defensive undertone on the short-term chart, even if the market has moved more or less sideways for most of the June month."
"Firstly, what we view as a double top signal (two tests of 1.39+ and the break under the intervening low at 1.3666) remains intact; the formation suggests a measured move drop to the upper 1.33 area in the next 2-3 months."
"Secondly, spot is trading below all the major daily MA studies, which are slowly rolling over negatively (40-day MA below the 100-day MA and nearly crossing the 200-day MA)."
"Thirdly, trend momentum signals are still—just—bearishly aligned on the daily and weekly studies, suggesting spot will struggle to rally from here at the moment."
"We spot key resistance at 1.3660/70 now—breakdown point from the above-mentioned double top. Short-term support is 1.3575/80 and below here should see the 1.3500/10 area quickly retested. We prefer to look to sell rallies in the upper 1.36s."