The EURUSD daily chart is showing a double doji
According to JP Morgan, EUR/USD has stopped its decline from the April high of 1.1097 after reaching the March 78.6% retrace at 1.0637. Despite the lack of daily bullish pattern-based signals prior to the rebound, the bank highlights that lower-frequency bullish signals on the broad US dollar index chart preceded the April-May trend.
Historically, these lower-frequency signals have aligned with predominantly bullish dollar trends over the next 1-6 month periods. Therefore, JP Morgan believes that any short-term strength in the Euro is likely to be counter-trend.
The bank identifies nearby resistance at the 100-day moving average and April 38.2% retrace, both sitting at 1.0810.More significant resistance is noted at the range from 1.0909 to 1.0942, marked by the top pattern breakdown, the 50-day moving average, and April 61.8% retrace.
JP Morgan maintains a high conviction bearish bias for EUR/USD as long as the pair continues to trade below this key resistance zone. Initial medium-term support is identified just below the market at 1.0483-1.0582, including the November-May pattern trend line, October 2022 38.2% retrace, 200-day moving average, and 2023 range lows.
The bank anticipates further bearish pressure to test this support area into the summer months. The next level of support is projected at the September 2022 50% retrace, at 1.0315.
For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.