EUR/USD: A regime change confirmed, selling opportunities on rallies - JPMorgan

FXStreet (Bali) - A new downtrend has been established in EUR/USD, with recoveries providing selling opportunities from now on, notes Thomas Anthonj, FX Strategist at JPMorgan.

Key Quotes

"The exceptionally short-lived wave 2 rally to 1.3701 in EUR/USD last month plus the following break below 1.3477 (last major low) basically confirmed a long-term trend reversal at 1.3993 (May high). Given the extent of the decline from 1.3701 it is highly likely that we are dealing with an internal 3rd wave impulse with a projected target at 1.2908 (wave 1 x 1.618), provided key-resistance at 1.3495/1.3503 (minor 38.2 %/pivot) is not taken out. Above the latter though, we’d have to be prepared for a minimum recovery to 1.3622 (minor 76.4 %) and to 1.3665/73/80 (200 DMA/pivot/50 % on higher scale)."

"Only a decisive break above the latter (i.e. above 1.3701 = pivot) would suggest that we are dealing with 2nd wave rebound on higher scale to 1.3845 (int. 76.4 %). On the downside we see interim support at 1.3295 and at 1.3104 (2013 lows) before 1.2908 would come into focus."