EUR/USD failing to sustain rebound

<p>EUR/USD (daily chart shown below) has thus far failed to sustain its most recent rebound after hitting a new two-year low of 1.2356 more than […]</p>

EUR/USD (daily chart shown below) has thus far failed to sustain its most recent rebound after hitting a new two-year low of 1.2356 more than a week ago.

From that long-term low, the currency pair made a modest recovery, climbing to as high as 1.2576 in early trading on Monday before plunging back to the downside.

EUR/USD continues to trade within a steep bearish trend since early May. The most significant rebound within this downtrend thus far occurred just last month in October. During that month, price action pulled back up to a high of 1.2886, as well as the noted 50-day moving average, before retreating sharply.

2014-11-17-EURUSD

That strong retreat broke down two weeks ago below the prior low of 1.2500 that was hit in early October. The plunge then extended down to the 1.2450 support target and then promptly broke down further to hit the noted two-year low of 1.2356 before rebounding.

With any further downside momentum that breaks below that long-term low, which would confirm a continuation of the entrenched downtrend, the next major support target immediately to the downside resides around the 1.2300 level. Any additional downside momentum below 1.2300 could prompt the currency pair to decline towards a re-test of the major low around 1.2040 that was hit in mid-2012.

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