Bank of America Global Research discusses the technical outlook for EUR/USD bull and bears cases.
"Bear case: On July 22 euro closed at 1.1771 and the 50d SMA crossed below the 200d SMA (sometimes referred to as a death cross). In the past, euro was lower 35-60 trading days later 66-75% of the time. 50 trading days later had the strongest bias for lower euro. This suggests (give or take) October 1 the euro is lower than 1.1771. Since the signal occurred euro has broken below trend line support and make a lower low," BofA notes.
"Bull case: The bullish price/rsi divergence and rally back above the 50d SMA are signals that further downside might be hard to achieve. If euro begins to rally from support at 1.18 in the next week or two then a head and shoulders bottom may form. If this forms and the neckline at 1.1909 breaks, it will target 1.2095 and 1.2205," BofA adds.