Societe Generale (SocGen) provides a technical analysis of EUR/USD, noting that the pair has been in a steep descending channel. While there is scope for short-term bounces to reach resistance levels between 1.0820 and 1.0870, the downtrend remains persistent.

Key Points:

• Steep Descending Channel: EUR/USD has been consistently falling within a well-defined channel, reaching its lower bounds around 1.0630/1.0610.

• Daily MACD: The MACD is in deep negative territory, signifying an overstretched move to the downside, although no reversal signals are yet visible.

• Resistance Zone: In the event of a short-term bounce, the 200-day moving average (200-DMA) at 1.0820/1.0870 will serve as significant resistance.

• Next Supports: If the pair fails to cross the 200-DMA, SocGen sees next potential support levels at 1.0480, with further downside projections at 1.0430/1.0400.

Analysis:

For Forex Traders:

• Short-Term Bounce: Keep an eye on the 1.0820/1.0870 resistance zone if a short-term bounce materializes.

• Trend Confirmation: Failure to cross the 200-DMA would likely confirm the continuation of the downtrend.

For Investors:

• Overstretched Move: The deep negative MACD indicates a potentially overstretched move, but reversal signals are not yet apparent.

For Economists:

• Economic Factors: The technical downtrend could be reflecting broader economic dynamics affecting the EUR/USD pair.

The Takeaway:

SocGen believes that while there's room for short-term bounces in the EUR/USD, it is crucial to watch the 200-DMA resistance zone closely. Failure to break above this point may lead to a continuation of the prevailing downtrend with support levels likely at 1.0480 and projections at 1.0430/1.0400.