EUR/USD continued its grind lower and eventually returned back below the 1.3170 line that capped it between September and December 2012. This is a continuation of the break below the uptrend channel. EURUSD Extends head and shoulders breakdown – Click image to enlarge Will the pair settle in the lower range? The day began with a better tone: an upbeat release from Germany’s IFO sent the euro higher. However, euro/dollar was unable to breach the 1.3255 line, and its bounce from the big fall of the previous day seemed like a dead cat bounce. What happened next is a usual dead-cat bounce reaction: if it can’t recover, a new fall occurs. The EU Commission released its winter report that painted a gloomy picture regarding the economic output of euro-zone countries as well as budget deficits. In addition, the looming Italian elections also weigh on the single currency. Under 1.3170 So, the pair lost the 1.3170 line. This line was first met in mid-September 2012 and was challenged several times since then, as the chart shows. After breaking higher, the pair traded in an uptrend channel and even managed to temporarily shoot above this channel and reach 1.37. But, the return to the channel happened quickly, and the pair found itself sliding lower. The breakdown below the channel began was also a breakdown in a head and shoulders pattern and this started a rapid descent and now the pair is back to the old range. Here is a view of the Head and shoulders (the two higher thick black lines): EURUSD Head and Shoulders Chart – Click image to enlarge Where will it go from here? Support appears at 1.3130, 1.31 and 1.30 of course. Higher resistance remains at 1.3255, followed by 1.3290. For more levels, see the EUR/USD forecast. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Forex News Today: Daily Trading News share Read Next Moody’s Downgrades UK Credit Rating – GBP Crashes Matthew Lifson 10 years EUR/USD continued its grind lower and eventually returned back below the 1.3170 line that capped it between September and December 2012. This is a continuation of the break below the uptrend channel. [caption id="attachment_41249" align="alignright" width="350"] EURUSD Extends head and shoulders breakdown - Click image to enlarge[/caption] Will the pair settle in the lower range? The day began with a better tone: an upbeat release from Germany's IFO sent the euro higher. However, euro/dollar was unable to breach the 1.3255 line, and its bounce from the big fall of the previous day seemed like a dead cat bounce. What happened… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.