EUR/USD gives back gains, targets new lows

<p>EUR/USD (daily chart shown below) has given back most of the gains it made during a recent rebound that hit a Tuesday high of 1.2568, […]</p>

EUR/USD (daily chart shown below) has given back most of the gains it made during a recent rebound that hit a Tuesday high of 1.2568, above the 50-day moving average.

Since that high, the currency pair has dropped for the past two days to approach the two-year low of 1.2246 that was just hit early last week.


This renewed bearish momentum is an attempt to continue the strong bearish trend that has been in place for the past seven months since May’s 1.4000-area high.

In the face of continued US dollar strength and some positive economic data recently in the US, EUR/USD appears poised to continue this bearish trend towards further lows.

Now trading under its previous downside target of 1.2300, EUR/USD may continue to decline under this key support/resistance level. In that event, the next major target to the downside resides around the 1.2040 level, the pivotal low that was hit in mid-2012.

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