EUR/USD: Citibank's technical analysis (daily) continues to suggest a pursued drop

Citi reported in a forex technical analysis on the EUR/USD that its daily chart is similar to the DXY (dollar index) and continues to point to a further decline.

"The pattern on the DXY between March 2015 and May 2016 is very similar to that between July 2012 and May 2014.

We believe this was just a pause for the dollar and that the uptrend is resuming.

The double retracement of 76.4% since the DXY lows and the inverted shoulder-head-shoulder pattern completed two weeks ago support this technical analysis.

Unsurprisingly (the EUR is weighted at 57.6% of the DXY), the EUR/USD looks very similar to the DXY (upside-down of course). The pair completed a shoulder-head-shoulder figure with a target under 1.03.

If this target is reached, the EUR/USD would break the 2-year consolidation level and suggest a fall towards the mid-0.90 level.

Strong interim support before these levels is at 1.0810 / 20.

Citi has two short EUR/USD positions right now.