EUR/USD plunges below major support target

<p>EUR/USD (daily chart shown below) has made a quick plunge below its prior support target of 1.2750, which was where the currency pair formed a […]</p>

EUR/USD (daily chart shown below) has made a quick plunge below its prior support target of 1.2750, which was where the currency pair formed a major double-bottoming formation in March/April and July of 2013.

This breakdown below support establishes a new long-term low and tentatively extends the strong bearish trend that has been in place since the 1.3993 multi-year high in early May.

The decline since May’s high has been mostly sharp and steep, especially since the drop from 1.3700 resistance in early July. After the 50-day moving average crossed below the 200-day in late June, both moving averages have been pointing sharply to the downside.

2014-09-25-EURUSD

Having plummeted below many major support levels over the past several months, including the noted 1.2750 level on Thursday, the directional bias for the currency pair continues to be exceptionally bearish.

The next major support target to the downside resides around the 1.2450 level, last hit over two years ago, followed by the 1.2300 level. Tentative, short-term upside resistance on any rebound now resides around the 1.2800 level.

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