First appeared on eFXplus on Sep 30 - 10:30 AM
Bank of America Merrill Lynch Global Research discusses EUR/USD technical outlook and notes that a structurally bearish trend line breakdown may occur in the longest term chart of euro if September ends < 1.10 as this could trigger a new wave of bearish sentiment.
"The longest term log scale chart of EUR/USD shows a rising trend line connecting the 1985, 2001 and 2016 lows. Spot is currently trading below it as we head into month end. A monthly close below 1.10 bearishly breaks this trend line. Assuming a reversal and close back above 1.10 does not occur in October, we think this break carries long term bearish implications such as the bottom of the seven year old bear channels," BofAML notes.
"The trend line on the arithmetic chart has not been tested or broken and resides at about 1.05 in 2020. Closing below this line would add further to a bearish conviction. (The weights used to determine the euro value on Jan 1, 1999 are applied to history to create data prior to launch," BofAML adds.
BofA Merrill Lynch Research/Market Commentary