EUR/USD: another spike lower on the cards - Westpac

Analysts at Westpac offered their technical projections for EUR/USD.

Key Quotes:

"Longer term profile:

"Broad consolidation since 2015 is at risk of completion and current rebounds are likely to falter around mid-range levels. Bias for a dynamic spike lower, but that could complete broader patterns Intra-month/inter-week."

"The overlapping of recent bounces off the 1.0340-50 lows suggests that rebounds are corrective (rather than dynamic trend driving) and so the bias is that further gains will struggle to reach previous midrange levels (1.0975-1.1040 area)."

"Further rebounds are unlikely to breach 1.0730-35 and the risk of an early top at 1.0685 is now increasing."

"However, slippage should also be contained and hold above 1.0460-70 in advance of a secondary corrective squeeze forming. Such a secondary squeeze would be likely to force a test of 1.0740-1.0830 area before EUR establishes an interim range high."

"Conclusion: The breach of broader range support has been brief but suggests that there will be another spike lower in order to complete patterns off 1.16’s. Interim gyrations will form a frustrating correction before this leg-lower develops."