We stressed how important the closing levels for EUR/USD are, especially after what happened in September.
It is clear to see that the pair is not only seeing no rebound from the initial lows, but actually continues digging deeper, now slipping below another round number. The pair isn’t going too far below this level, but it seems the only way is down.
In September, Draghi’s dovish words were strong, but the end result was only a 24 hour shocker. By late on Friday, profits were taken and the move was reversed.
This time it’s different, as Draghi dealt 5 deadly blows to the euro leaving no room for error. The initial fall to 1.1240 was followed with a slide to support at 1.1165 already in the press conference, and it was continued to grind gradually down to 1.1070, breaking uptrend support on the way.
A recovery attempt to recapture uptrend support reached only 1.1140 and another fall began, partially fueled by the Chinese rate cut, that showed the trouble in the world.
As liquidity thins down, profit taking or any kind of squaring is nowhere to be seen. Here is how this crash, following long days of very tight range trading, looks on the 30 minute chart×¥
More: Draghi opens door for EUR/USD at 1.05 – Goldman Sachs
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