On Friday, the EURUSD formed a base agaisnt the 1.2181 level, broke lower reaching a new year low for the pair at 1.2162 before moving sharply higher on Friday squaring. As NY opens the price is back down and is holding near the 1.2181 level (low 1.21797). A move below this level should solicit more momentum to the downside for the pair. The low from last week at 1.2162 and then the 50% of the move up from the 2000 low to the 2008 high at 1.2131 would be the next targets for the pair. The 2010 low of 1.1876 (soon after the 1st Greek bailout) could be tested this week, but only if the bearish momentum started today, is able to break through the key support levels starting with the 1.2131 level.
The price has bounced a bit in the 1st hour of NY trading and is testing the underside of the broken trend line in the process (see chart above at 1.2199). A move above this level will look toward the 38.2% of the move downs today at 1.22148. The 100 bar MA on the 5 minute chart is moving toward this level (currently at the 1.2217). Traders who are short would want to see the price stay below this level. On the downside, the low from last week at 1.21617 and then the much talked about midpoint of the move up from the 2010 low to the 2008 high at 1.2131 are the downside targets.
