EUR/USD plunges back down towards lows
James Chen November 21, 2014 6:52 PM
<p>EUR/USD (daily chart shown below) plunged in early trading on Friday as markets moved dramatically after China’s surprise rate cut. Earlier in the week, EUR/USD […]</p>
EUR/USD (daily chart shown below) plunged in early trading on Friday as markets moved dramatically after China’s surprise rate cut.
Earlier in the week, EUR/USD had rebounded up to a high around 1.2600, just short of its 50-day moving average, before Friday’s plummet.
That rebound had lifted the currency pair off its new two-year low of 1.2356 that was hit two weeks ago in early November.
The large price drop on Friday has brought EUR/USD back down to approach this long-term low once again after yet another failed rebound within a strong and continuing bearish trend.
With any further downside momentum that breaks below the noted 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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