EUR/USD maintains the threat of a lengthier correction while below 1.2259 – Credit Suisse

The EUR/USD pair below gap resistance from Monday morning at 1.2259 can maintain the risk for further consolidation/corrective weakness, with support seen at 1.2129/22, then the 1.2059 recent low, per Credit Suisse. 

Key quotes

“A rollercoaster session for EUR/USD on Monday as early weakness was contained at price support at 1.2126/16 for an impressive intraday recovery, but with subsequent strength then capped at the top of the price gap from the open yesterday morning at 1.2259. Whilst capped here though the threat for further corrective weakness can remain with support seen at 1.2187 initially, then back at the 13-day average at 1.2158, which we look to try and hold again.” 

“A break below 1.2129/22 though would now raise the prospect of a more concerted setback and a fall back to the 1.2059 recent low, potentially as far as what we expect to be better support at 1.2017/11 – the 38.2% retracement of the November/December rally and September high – with a better floor expected here.” 

“Back above 1.2259 can reassert an upward bias for strength back to the 1.2273 current high, ahead of the March ‘“measured base objective’ at 1.2355. Big picture, we continue to look for our core objective from late July at 1.2518/98.”