EUR/USD: Overlapping of rebounds suggest limited corrections - Westpac

According to the Tim Riddell, Research Analyst at Westpac, the overlapping of recent EUR/USD bounces off the 1.0340-50 lows suggests that rebounds are corrective (rather than dynamic trend driving) and so the bias is that further gains will struggle to reach previous midrange levels (1.0975-1.1040 area).  

Key Quotes

“Further rebounds are unlikely to breach 1.0730-35 and the risk of an early top at 1.0685 is now increasing.”

“However, slippage should also be contained and hold above 1.0460-70 in advance of a secondary corrective squeeze forming. Such a secondary squeeze would be likely to force a test of 1.0740-1.0830 area before EUR establishes an interim range high.”

“Conclusion: The breach of broader range support has been brief but suggests that there will be another spike lower in order to complete patterns off 1.16’s.  Interim gyrations will form a frustrating correction before this leg-lower develops”