EUR/USD Technicals: How Low Will Euro Go?

Last updated 2/5/2010 1:26 PM EST (GMT -5) 0 Comments - Add your comment

FX360 Technical Analyst Staff

Technical Analyst, GFT

Back on January 19th, a longer-term technical feature was posted pointing to extended EUR/USD losses with a break below 1.4216 serving as a catalyst of heightened bearish momentum. Daily price action discussed within that feature (see " EUR/USD Collapse in Days, Weeks Ahead? ") suggested a potentially strong bearish continuation down to converging Fibonacci support down around 1.35-1.34 followed by 1.31-1.30 primarily due to the shallow 38.2% retracement at point C.

(EUR/USD - Jan 19th)

Shortly thereafter, the key 1.4216 level of support was broken and the euro has dropped off over the past 3 weeks as expected. Prices now approach the first Fibonacci support zone between 1.35-1.34. This makes for a good risk management level for existing shorts, and opens the door for some relatively shorter term buys for the more aggressive traders out there that don’t mind counter-trend opportunities (this support zone is defined by a bullish Gartley pattern). More to come as price unfolds...

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