EUR/USD plunge continues down to key support

<p>EUR/USD (daily chart shown below) has continued its recent plunge by dropping swiftly to its key support target at 1.3500, as mentioned in our previous […]</p>

EUR/USD (daily chart shown below) has continued its recent plunge by dropping swiftly to its key support target at 1.3500, as mentioned in our previous analysis.

This plunge is an extension of the major decline within the past four weeks that brought the currency pair down from its two-and-a-half-year high of 1.3993 in early May.

In the process of this decline, EUR/USD broke down below its 50-day and 200-day moving averages, as well as the 1.3700 support level, substantially disrupting the bullish trend that had been in place for the prior 10 months.

EUR/USD chart - 05.06.14


Having dropped by around 3.5% within a month down to major support at 1.3500, which is also around the 38% Fibonacci retracement of the noted 10-month uptrend, EUR/USD has reached down to a critical juncture.

In the event of a further breakdown below 1.3500, a lower downside support target resides around the 1.3300 level, last hit in November 2013.

With any rebound and recovery from the current support, the key bullish objective remains at the noted 1.4000 level for a potential uptrend resumption.


Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.