EUR/USD Breaks Down

EUR/USD Breaks Down

EUR/USD Breaks Down

After consolidating above 1.13 for the past 10 trading days, euro ended the North American trading session sharply lower against the U.S. dollar and a move to 1.1260 would confirm a near term top. Weak Eurozone industrial production sparked the sell-off but it was the recovery in the dollar that drove the pair to fresh 2 week lows. If 1.1260 is cleared, the next stop for EUR/USD will be at least 1.12 and possibly even 1.1150. Eurozone consumer prices are scheduled for release tomorrow – the recent rise in German CPI points to a stronger release but the market’s appetite for U.S. dollars will dictate the performance of the currency.

Technically, how EUR/USD trades near 1.1270 is key. If it extends to 1.1260, then the 23.6% Fib retracement of the 2014 to 2015 will officially be broken and in that case a stronger correction to 1.1150 is likely.

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