- EUR/USD has printed a daily below 1.10 for the first time in four months.
- Wednesday’s bearish marubozu indicates the sell-off has legs.
EUR/USD found acceptance below 1.10 on Tuesday – its first daily close below the psychological support since Oct. 10.
The psychological support was breached with a bearish marubozu candle, which comprises of little or no wick and a long body – a sign of strong bearish sentiment.
As a result, the latest decline below 1.10 looks to have legs, more so, as the 14-day relative strength index is reporting bearish conditions with a below-50 print and the 5- and 10-day averages are trending south.
The pair looks set to challenge support at 1.0981 (Nov. 29 low). Acceptance under that could cause more sellers to join the market, yielding a deeper drop toward 1.09. On the higher side, a close above marubozu’s high of 1.1048 is needed to invalidate bearish pressures.