The EURUSD continues to be pressured with the pair trading at the lowest level since December 2005. The pair is moving toward the 1.1800 level. It is testing a lower trend line on the hourly chart at the 1.1805 level (see chart below).
EURUSD tests trend line support on the hourly chart
The post-2008 crisis low from 2010 was breached today with the 1st hour tumble. The price did recover (it looked very similar to Monday’s trade) and traded at 1.1895, but around the time London traders were entering for the day, the price fell back below the key level and stayed below (see hourly chart above).
The next target will look toward the 1.1756 to 1.1743 area. The 1.1756 is a parallel trend line on the hourly chart currently (it is moving lower – see chart above). The 1.1743 was the level that the euro was introduced to world financial markets as an accounting currency on January 1, 1999 – replacing the ECU at a ratio of 1:1 (US$1.1743). Since November 2003, the price has not had a closing month below the 1.1743 level (there have been 10 trading days in November and December of 2005) that the price closed below the 1.1743. That is it. I would think that the market might use the level as a stopping point should the bias remain bearish.
EURUSD monthly chart. 1.1743 is the next major target.
Looking at the intraday 5 mintue chart, the pair is in a down channel with topside resistance now at 1.1830. Stay in this channel and the shorts feel little pain. Above that the 38-2-50% of the move down will be eyed. Even then, traders short will probably be ok with remaining short (at least for most of the position) as long as the price stays below the 1.1876 level. This was a key downside target and breaking it today – and moving away from it – should represent a key break that should not be breached if the sellers are to remain in control. Putting it another way, a move above would be indicative of some new story/dynamics for the pair.
EURUSD 5 minute.
