EUR/USD: Closing break above 1.2243 to open up 1.2317/50 – Credit Suisse

EUR/USD has seen a sharp acceleration higher over the past few sessions, with the market closing above the 78.6% retracement of the 2021 fall at 1.12212 on Tuesday – exposing the February high at 1.2243. A break above here would open up a move to the 1.2324/50 high and potential downtrend from 2018, economists at Credit Suisse report.

Support is at 1.2125

The pair is now testing the February high at 1.2243, with a break above exposing the top of the broader range, the YTD high and the potential downtrend from 2018 at 1.2324/1.2350, which is expected to be an even tougher resistance.” 

“A key driver of the recent move higher in our view has been the tightening in US/Germany spreads, which we believe can continue further yet down to 165bps.”

“Short-term support moves to the broken high at 1.2182, then intraday support at 1.2125, which ideally holds to keep the risks directly higher. The next support below here is at the uptrend from the 2021 lows at 1.2093, with only a breaking below here raising concern of a more pronounced turn back lower within the range.”