EUR/USD (daily chart) as of March 19, 2013 has continued its bearish trend from last month’s 1.3709 high to drop down to the 50% retracement level of the prior bullish trend (measured from the July 2012 low at 1.2041 to the noted February high at 1.3709). Despite EUR/USD having been entrenched in somewhat of a consolidation since late February, the general bias for the consolidation has continued to be to the downside.
Price began the current trading week by gapping to the downside from last Friday’s close around the 1.3070 price region. This bearish move resulted in a low of 1.2880 yesterday, which was around the 50% retracement of the prior bullish trend, establishing a 3-month low for the pair.
Currently, price is fluctuating well under the 1.3000 handle and continues to be biased to the downside. Within the context of the strong, short-term bearish trend extending back to the beginning of February, the key price event to watch for would be a breakdown below the 1.2880 low. In this event, key downside objectives reside around the 1.2800 and then 1.2650 support levels.
James Chen, CMT
Chief Technical Strategist
City Index Group
Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.Get the 5 most predictable currency pairs