EUR/USD (daily chart) as of March 13, 2013 has consolidated its recent declines by fluctuating around key 1.3000 support for the last two weeks. This occurs after price formed a head-and-shoulders reversal pattern with its high around 1.3700, and then broke down strongly below a major prior support level around 1.3300 in late February. That breakdown provided indication of a potential change in the trend bias, disrupting the previous uptrend that had been in place for the prior seven months.
Since falling to the major 1.3000 support level more than a week ago, the pair has consolidated around this price area, but has pushed towards a continuation of the new bearish trend. Today’s bearishness has helped to clarify that directional bias by dropping further down towards 1.2900. On a trend continuation of this bearish momentum, downside price targets reside first around the 1.2800 and then 1.2650 support levels.
James Chen, CMT
Chief Technical Strategist
City Index Group
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