EUR/USD Approaching Downside Targets

<p>EUR/USD (daily chart shown below) has spent the last two weeks in a sharp decline as the US dollar has strengthened dramatically against all major […]</p>

EUR/USD (daily chart shown below) has spent the last two weeks in a sharp decline as the US dollar has strengthened dramatically against all major currencies during this time.

Mid-May saw a three-month high of 1.1465 after a significant rebound from the 1.0500-area lows a month earlier.

After hitting that high, the currency pair quickly began a retreat that has persisted for the past two weeks, breaking down below several support levels. Currently, EUR/USD is once again trading below its key 50-day moving average for the first time since late April.

2015-05-28-EURUSD daily chart

 

With the major downtrend extending back to last May’s 1.4000-area high still solidly intact, and the short-term trend having also turned back to the downside, EUR/USD continues to hold a strong bearish bias.

The 1.0800 downside support target has already been closely approached. With any breakdown below 1.0800, the next major downside target is at the noted 1.0500 support level, the area of the currency pair’s multi-year lows. Upside resistance within the current downtrend continues to reside around the key 1.1100 level.

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