EUR/USD strength has been capped as looked for at a cluster of resistances at 1.0770/0835. Economists at Credit Suisse expect the pair to drop substantially toward the 1.00/0.99.

Move above 1.0835 to trigger a deeper than expected recovery

“We look for a resumption of the core downtrend from a cluster of resistances, which include the 23.6% retracement of the entire 2021/22 fall, the 38.2% retracement of the fall from February, the 55-day moving average, the mid-April lows and the back of the confirmed broken uptrend from 2017, which all coincide at 1.0770/0835 for a retest and eventual break of the 2017 low for a fall to our next main objective at parity/0.9900.”

“Though not our base case, above 1.0835 would trigger a deeper than expected recovery, with next resistance seen at 1.0923/37.”