EUR/USD: the rally is facing solid resistance (Commerzbank)

Karen Jones, an analyst at Commerzbank, explains that the EUR/USD pair is currently trading in its range again, while its recent downward break hasn't been sustained.

"The market is getting closer and closer to the 55-day and 100-day moving average resistance at 1.3366/67 and we may see a failure in this area, and some slippage towards the lower 1.12 area.

We have doubts that the EUR/USD will at this stage test the 61.8% Fibonacci retracement of the 2017-18 rise to 1.1186, but the intraday Elliott wave count remains negative and the market is moving in a range.

There is now considerable above-market resistance that extends to the 200-day moving average at 1.1474. Any rallies will find initial resistance at 1.1366/67, the 55 and 100-day moving averages, which keeps the end-of-February high of 1.1420, and the downward trend line at 1.1422. Below 1.1185/75 are 1.1110, the low of May 2017 and 1.0814 the 78.6% retracement."