EUR/USD Shows No Life at Key Level, Major Leg Down Looks Next
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- EUR/USD showing little life at major support
- A break of the March low could lead to big move
EUR/USD showing little life at major support
The EUR/USD trend-line extending higher since the mid-1980s is something I have been discussing a lot lately due to its potentially massive impact on not only the single-currency but the entire FX market. How do I get the mid-1980s price when the Euro has only been around since the late 1990s?
By piecing together the constituents' currencies that make up the Euro going back to the days when FX began freely floating. Through this reconstructed lens we see a trend-line from 1985 to current. The way EUR/USD has failed to garner much buying interest around such a large threshold suggests that it wants to break, and possibly soon.
The coiling of price action since the March low points to a breakout to take place most likely in the weeks ahead. The big level to watch is 10635, the March low. A firm drop through could set into motion a powerful down-move that takes out the January 2017 low at 10340 quickly, followed by parity. Given the magnitude of the trend-line and general weakness of the Euro, it seems probable there is much further to go than just parity. We will continue to monitor in the weeks/months ahead…
EUR/USD Monthly Chart (BIG line-in-the-sand)
Data Source: Bloomberg
EUR/USD Daily Chart (wedge break, big level is 10635)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.