EUR/USD lost nearly 40 pips on Monday. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the world’s most popular currency pair to edge lower following an outside day to the downside.

1.1721 four-month downtrend to cap

“EUR/USD charted an outside day to the downside yesterday and seems to have lost upside impetus, the stop is a profit stop but we have a sell signal on the DMI, which is worrying.”

“The intraday Elliott wave counts remain positive still and for now we cannot rule out a test of the 1.1721 four-month downtrend, but look for that to hold.”

“Below 1.1522 (last week's low) lies the 50% retracement of the move from 2020 and the March 2020 high at 1.1492/95.”

“Key support is the previous downtrend (from 2008) which is now located at 1.1395.”