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.

2014-12-18-EURUSD

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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