FXStreet (Delhi) – Research Team at Societe Generale, notes that after breaching below the flag formation, EUR/USD has retested March lows of 1.05/1.04 which more importantly correspond with the multi decadal channel lower limit. Key Quotes “Currently a sharp rebound is being witnessed however signs of reversal still lack. Monthly RSI indicator is probing a horizontal line while weekly MACD still languishes within negative territory and below a resistance line. Thus indicators point towards limited upside in EUR/USD and the rebound is likely to remain capped.” “Ongoing correction is retracing the 2000-2008 up move however a break below key levels of 1.05/1.04 will confirm that this is in fact a downtrend of a larger degree. In such a scenario we can expect retracement of the whole up cycle since the 1980s and first meaningful support will be at 1.00/0.9930 and next at graphical levels of 0.96/0.9530 consisting of 1989 lows, 2001 highs and a projection for the down move.” “Short term, the pair formed a bullish engulfing yesterday and is hovering close to immediate resistance of 1.1010/85. The flag limit is currently at 1.1170 however due to rising slope it will be at 1.1270 within a week. This is also the 76.4% retracement from October highs. With daily stochastic approaching towards a resistance line, 1.1270 should cap the upside. Only a sustained move beyond 1.1270 will mean a possibility of retesting flag upper limit at 1.1875/1.22. In such a scenario, graphical level at 1.1530 will be an intermittent resistance.” For more information, read our latest forex news.