FXStreet (Edinburgh) - The offered tone is gathering further pace on Tuesday, sending the pair to extend the break below the 1.0900 handle ahead of the German ZEW Survey. “While relative rates could still weigh near term on markets pricing more in the way of Fed-ECB divergence, we continue to see the cross staying within the 1.05-1.10 range on a 1-3M horizon. We stress that the key story for 2016 will be that of a EUR/USD rebound as cyclical, valuation, flows and positioning are set to be supportive of the cross. We have left our forecasts unchanged and thus still project the pair at 1.16 in 12M”, argued analysts at Danske Bank. In addition, Karen Jones, Head of FICC Technical Analysis at Commerzbank, suggested “the market is facing tougher resistance at 1.10/1.1060 – recent highs and the 200 day ma and these should act as an effective near term ceiling. Key resistance remains the 1.1028/71 2014-2016 downtrend and 55 week ma and we view the market as bearish while capped here. Our target remains the 1.0523 recent low”. For more information, read our latest forex news.