The EURUSD is down sharply in trading today and in the process has moved to the lowest level since June 2020. That required taking out the November 2021 low at 1.1853. The low price has reached 1.11342 so far. The price is currently trading at 1.1144 as I type.
Looking at the daily chart, the price earlier this week will below the upward sloping trendline and the 61.8% retracement (at 1.12876). The selling after the FOMC decision, moved the price away from those levels. Today we are seeing the follow through selling as yields move sharply higher and the dollar moves with it (to the upside - EURUSD lower). The price has moved further into a choppy time in the market in 2019/2020. The next target on that chart comes in around the 1.1100 area (there is some swing levels above and below that natural target level). Below that the 1.0980 to 1.1018 is another swing area from the up and down price action during that time.
Drilling to the four hour chart below, the price decline has now seen the pairs price extend outside of the main consolidation area between 1.1221 and 1.13853. The extreme low from November 23 was also broken at 1.11853. That level is close resistance now stay below keeps the bears more in control.
Putting it another way after breaking out of this longer-term consolidation, moving back into it would not necessarily be a great thing from a technical perspective. Longer-term traders might wait until a move back above the 1.12208 level as well.
Having said that, recall that back on January 12, the price moved outside of the topside of the trading range above 1.13825 (see red shaded area on the chart below). The high price extended to 1.1482, before failing and moving back into the consolidation area on January 18 (and staying below that old high). The break failed. The buyers turned to sellers as a result.
Does that mean the price will rebound back into the consolidation area now?
On a key break, traders have to take the leap of faith that it means something. The "market" (all traders around the world) wanted to break lower. As the story unfolds, the market's collective mind may be changed, but the price action is the window into the soul of "the market" and right now dollar buying is the main theme (EURUSD selling). That has to be disproven by the technicals just like the technicals are supporting this new theme. Until then, the bears remain in full control.
