EUR/USD has failed to build on Friday's modest recovery gains and started to edge lower toward 1.1300 at the start of the week. Analysts at Credit Suisse believe that recent strength has been corrective only, with a break below 1.1272 needed to suggest the core downtrend has resumed.

Resistance at 1.1370 caps to keep the immediate risk lower

“With daily MACD momentum now turning lower again, this should add weight to our base case that the consolidation from last November and recent strength remains a corrective phase only ahead of the core downtrend eventually resuming.”

“Key near-term support stays seen at the recent reaction lows and uptrend from November at 1.1292/72. Below here should confirm the completion of a bearish continuation pattern for a resumption of the core downtrend to 1.1234/23 initially, then a retest of 1.1186/68.” 

“Big picture, we continue to look for an eventual fall to our 1.1019/02 main objective.”

“Resistance at 1.1370 ideally caps to keep the immediate risk lower. Above can see further range trading and a recovery back to 1.1423/36.”