EUR/USD continues trending lower, hitting the 1.05 handle and has only two support levels left. The team at SocGen focuses on the downwards channel:
Here is their view, courtesy of eFXnews:
EUR/USD is trading comfortably below the multi-decade channel support (around 1.0780, monthly closing, pointed by arrow).
Only a definite break below the aforementioned channel would negate the base formation in place since March 2015 and the resumption of the overall down trend undergoing since 2008 peak. In such a scenario, the downtrend would fetch the previous lows of 1.0540/1.0465 and most importantly 1.0180/1.00, the 8-year down channel support and the 76.4% retracement of the 2000 to 2008 up move.
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At this stage, long-dated indicators (here monthly RSI) continue to hold an 8-year support line (in blue) and therefore emphasize pivotal supports are near.
Short-term, EUR/USD is approaching near the lower limit of the one and a half year range represented by the trend line undergoing since March 2015 and the 6-month down channel (1.0660/1.0610)
Daily Stochastic indicator depicts oversold conditions at the approach of a multi-year floor and suggests immediate downside to be limited.
However, it will take a break past the multi-month graphical levels of 1.0810/1.0860 and the 23.6% retracement of the fall since last August for short-term rebound signals to emerge.
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