EUR/USD On Verge of Getting Crushed Below 20-Year Trend-line
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EUR/USD Technical Highlights:
- EUR/USD trading around very important 20-year trend-line
- A breakthrough brings into play parity, maybe worse
EUR/USD trading around very important 20-year trend-line
The Euro, along with other currencies, was crushed last week against the US Dollar, and that may be set to continue as a long-term trend-line is in the process of breaking, and potentially quickly left behind. There is a 20-year trend-line running up just above where EUR/USD ended on Friday. The lower-low below the Feb low, where a bounce off the long-term threshold first held, has further signaled that lower, perhaps much lower prices may lie ahead.
With more selling from here, the 2017 low at 10340 will be watched as the next level of significant support. Beyond there, parity is the next point of interest that could spark a bounce once touched. But we will have to watch how momentum is playing out at that point should we reach it before drawing any further conclusions.
A bearish bias is firmly in place, and it will be tough to turn this ship around in favor of higher prices. This would likely require a rally back well above the 20-year trend-line, then a pullback that doesn’t turn into another leg lower. Even then, the trend since the 2018 peak is a formidable one. For now, continuing to run with a bearish bias, but expecting that there could be some strong volatility along the way, and thus position-sizing should reflect such.
EUR/USD Daily Chart (looking lower)
EUR/USD Weekly Chart (20-yr trend-line)
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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.