In yesterday’s trading recommendation JP Morgan wrote about EUR/USD which started classical trend-opposite rally. Today it is approaching the key resistance between 1.3795/1.3822 zone (minor 76.4%/pivot) and 1.3800/93 (monthly trend/last top).
In its technical note to clients JP Morgan indicates that, such a move looks really massive and there is a high probability of capping the upside in case we are only dealing with a trend-opposite rally.
“In such situation, the downside would remain open for a min decline to 1.3436 (minor 76,4%) with a really strong option to extend even lower to 1.3104/01 (pivot/internal wave 3 projection)” –JMP stated in its technical note.
JP Morgan may even look for a much broader decline into 1.2479 (76,4%) – but the latter and 1.3024 (int. 76,4%) must also give way. According to this view, JPM opened a fresh short on EUR/USD and in its trade recommendation speaks about entry point around 1.3760, protective SL at 1.3900, first TP at 1.3450 and the second one at 1.3130.
Let’s look at the chart below to illustrate JP Morgan analysis:
