FXStreet notes that EUR/USD weakness has extended to the cusp of the 23.6% retracement of the entire 2020/2021 rally at 1.1945/14. Whilst analysts at Credit Suisse similarly look for this to hold at first, the presence of a larger top suggests the pair should see a move below here also and a deeper setback to 1.1800, potentially even 1.1695.

“A further sharp sell-off for EUR/USD following the completion of a larger ‘head & shoulders’ top below key support from the recent low and 38.2% retracement of the rally from early November at 1.2065/54 has brought the pair to the cusp of our target at 1.1945/14 – the 23.6% retracement of the entire 2020/2021 uptrend. Although our bias has been to look for a fresh floor here, at least at first, the threat of a top for the EUR itself maintains the likelihood we will see a move below here also.” 

“We would see next support  at 1.1800, then more importantly at 1.1695/91 – the 38.2% retracement of the entire 2020/2021 uptrend and rising 200-day average. We would though look for a more important floor here.”