EUR/USD Weakness Corrective, To Base At 1.2905/1.2840; Stay Bullish Against 1.28 - BofA Merrill

EUR/USD is inching closer to post a bearish outside bar after stalling against the 17m trendline resistance at 1.3002

However, for Bank of America Merrill Lynch, this weakness "remains corrective and this potential bearish daily bar will prove misleading" as indicating by the pair incomplete impulsive advances from both 1.2666 (Nov-13 low) and 1.2042 (Jul-24 low) indicate

"We would look for a base into the 1.2905/1.2841 zone before the uptrend resumes, with a break of 1.3002 clearing the way for the 1.3063 (9m neckline of a Head and Shoulders Base)," BofA expects.

"Through this latter zone in EUR/USD points to a major turn in trend, opening 1.3172/78, ahead of the Feb’12 highs at 1.3487 and beyond," BofA says.

To negate this view, the pair would need a New York close below 1.2800 ( 200d) which would then indicate that bears are gaining control again, BofA adds.

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