EUR/USD plunges towards 2013 lows

<p>EUR/USD (daily chart shown below) has continued its dramatic plunge towards long-term lows. Thursday’s price action brought the currency pair down below two major support […]</p>

EUR/USD (daily chart shown below) has continued its dramatic plunge towards long-term lows. Thursday’s price action brought the currency pair down below two major support levels – 1.3100 and the 1.3000 psychological support level.

In the process, EUR/USD has confirmed unmistakably a continuation of the swift and steep bearish trend that originated at May’s multi-year high of 1.3993. The downtrend since that high has represented more than a 7% decline in less than four months.

Having dropped by almost 2% in one day on Thursday, the pair has now established more than a one-year low.

If price continues to be under pressure by trading below the noted 1.3000 level, the clear downside support target resides around the 1.2750 level, which was where the currency pair formed a rather precise double-bottoming formation in March/April and July of 2013.

 

EURUSD chart

 
Any relief rebound back above 1.3000 after this week’s plunge should be limited to the upside by the noted 1.3100 resistance, a major support/resistance level.

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