EUR/USD drops to 1.0500 support target and new 12-year low

<p>EUR/USD (daily chart shown below) has dropped down to its 1.0500 support target, dipping slightly below it on Thursday before making a modest rebound. This […]</p>

EUR/USD (daily chart shown below) has dropped down to its 1.0500 support target, dipping slightly below it on Thursday before making a modest rebound. This now establishes a new 12-year low for the exchange rate.

This most recent plunge within the past two weeks brought the currency pair out of a consolidation that spanned most of February, and subsequently prompted a continuation of the sharp bearish trend that has been in place for the past ten months, since the 1.3993 high in early May of last year.

EUR/USD daily chart 12.3.15

 

In the process of this plunge, EUR/USD declined rapidly to hit two major downside targets this week, including 1.0800 and the noted 1.0500 level.

With bearish momentum within an extended downtrend firmly in place, the embattled currency pair could likely have significantly further to fall before establishing any sustainable bottom.

Any further slide below 1.0500 could pressure EUR/USD towards its next major downside target at 1.0200, and then the key psychological point of parity (1.0000).

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