This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
EUR/USD consolidates around key support level
EUR/USD has been largely consolidating in early trade, with $1.2213 support being respected on a number of occasions. With that level representing both the neckline of a head and shoulders formation, alongside the 61.8% retracement, a break lower could see short-term downside.
However, with the wider trend pointing towards a resurgence for the pair, only a fall back below $1.2165 would bring a more bearish outlook. Until then, this recent sell-off looks like a retracement, with a break higher expected before long. Watch for an hourly close above $1.2257 for greater confidence that we are set to break higher from here.