EUR/USD: technically speaking, the euro could pursue its decline on the forex (Maybank)

Maybank notes that the EUR/USD could continue its decline on the forex in the short term.

"The EUR/USD strengthened with solid confidence data in the euro zone and a general weakening of the dollar.

A head-and-shoulders figure appears to be under construction, and a move below the 1,166 level (the neckline) may suggest a deeper downtrend towards 1.1420 (38.2% Fibonacci retracement of the 2017 rally) and 1.1250 (the 200-day moving average).

The resistance levels are at 1.17 and 1.1850 (50-day moving average).

However, the EUR/USD could consolidate near the lows - the daily bearish momentum remains intact but shows signs of weakening, while the stochastic is near oversold levels.

With the normalisation of the ECB now behind us, external US drivers (the Fed Chairman's choices, tax reform) will likely result in short-term orders. We still note the political developments in Spain that must be monitored."