EUR/USD to extend its decline toward 1.0880 on failure to defend 1.1000/1.0970 zone – SocGen

EUR/USD is retracing towards upper end of previous range near 1.1000/1.0970. Economists at Société Générale analyze the pair’s technical outlook. 

Test of 1.1270 hurdle has led to a wave of pullback

EUR/USD broke out from a multi-month consolidation zone and marched towards the objective of 1.1270 representing the 61.8% retracement from 2021. Test of this hurdle has led to a wave of pullback. The pair is retracting towards the upper part of previous range at 1.1000/1.0970. 

Daily MACD is within positive territory and above its trigger denoting lack of steady downward momentum. It would be interesting to see if the pair can defend the zone near 1.1000/1.0970. Failure could result in an extended decline towards the multi-month trend line at 1.0880 and perhaps even towards 200-DMA near 1.0700.