Bank of America Global Research discusses EUR/USD technical outlook.
"Our 2022 technical year ahead view targeted the 1.08s on euro and noted that could be an ideal location to be on watch for a bottom. Euro reached target in March 2022 and rallied to 1.1185 putting us on "bottom watch." However the decline from 1.1185 broke to new lows and the trend line from the 2017 lows which meant no bottom had formed. This bearish breakdown and decline below the 2020 lows means the market must grapple again with the potential for euro to see parity," BofA notes.
"Heading into the Fed the euro is oversold at about 1.05; a level the market has liked to buy. An oversold bounce that retests "old support now resistance" is reasonable, such as into the low 1.08s. In such a rally, the main technical risk with no bottom seen yet is selling resumes on the bounce," BofA adds.