The EURUSD is the weakest currency in trading today and is down the most against the greenback (it is currently down by 0.73%).
In the pairs move lower, the price fell below the next target on the downside at 1.2660 level in trading today, and has continued its trend move to the downside (see weekly chart below). The 1.2660 level is now resistance for those traders who have been riding the trend lower and stepping to the downside (there are closer resistance levels which are outlined below). That level corresponds with the low from the November 11,2012 week. The next target off the weekly chart is probably the 1.2500, which is a nice round number, and also the low price from the September 2, 2012 trading week.
Technical Analysis: EURUSD falls below the next target at the 1.2660 level (risk now)
Remember, “it ain’t over till it’s over” (see week review video by CLICKING HERE), and the EURUSD trend certainly looks like there are no worries for the sellers/bears. The price correction higher could only get to the 1.2714 – well below the “line in the sand” from the lows at the 1.2746-57 (see weekly chart above).
Today from a fundamental perspective, the EU CPI Flash data continues to be a huge concern at 0.3% for the headline reading and 0.7% for the core (estimate 0.3% and +0.9%). With the ECB meeting on Thursday and Draghi press conference, there is only one thing they/he can possibly do and say now. This should keep the corrective buying in check and the trend to the downside going.
On the hourly chart, the pair fell below the first of two trend lines that were outlined in the weekend video post (see blue circles in the chart below). That break came at the 1.2617 level, and for those traders looking for a level to lean against on corrections, this would be a level to look for sellers/sell.
Note that a move above this level would put intraday traders on alert for a possibility of a further correction, although I don’t expect anything too great and would expect that the 1.2660 level off the weekly chart should hold any correction.
The next target on the downside comes in against the next trend line currently at the 1.2554 level (see green circles in the chart below). Below that, the 1.2500 level from the weekly chart becomes the next target.
The one thing that may slow the pair today, is that the range for the day is 133 pips and the average over the last 22 trading days is only 80 pips. In a trending market the range can go farther than traders expect so be aware. On September 4 the pair moved 235 pips, on June 5th the pair moved 167 pips and on May 8th the pair moved 161 pips. So be aware…It Ain’t Over Till It’s Over.
Technical Analysis: The EURUSD has fallen below the 1.2660 level and the first trend line. Next target 1.2554.
