EURUSD has completed a large bearish “outside day.” Analysts at Credit Suisse expect the pair to resume the core downtrend.

Resistance at 0.9977 now ideally caps

“A sharp reversal lower post the FOMC has seen EURUSD complete a large bearish ‘outside day’ to not only add weight to our core view that consolidation from late September has been a temporary pause in the core downtrend but also clearly reassert an immediate negative bias in this range.

“A close below the uptrend from late September at 0.9766 should see the negative tone maintained for a test of the recent bullish ‘outside day’ low at 0.9708/04. Below the October low at 0.9636/34 is probably needed to confirm the core bear trend has resumed for a move back to the 0.9537 YTD low and eventually, we think, 0.9338/30.” 

“Resistance is seen at 0.9840 initially, then the 55-day average at 0.9890, which we look to now ideally cap on a closing basis. Back above 0.9977 though is needed to reassert a positive tone.”