EUR/USD weighed down below 200-day moving average
James Chen May 22, 2014 9:36 PM
<p>EUR/USD (daily chart) has continued to fall from its new two-and-a-half-year high of 1.3993 that was reached two weeks ago. On reaching that high, which […]</p>
EUR/USD (daily chart) has continued to fall from its new two-and-a-half-year high of 1.3993 that was reached two weeks ago. On reaching that high, which was just slightly short of its 1.4000 upside target, the currency pair promptly plummeted below its 50-day moving average down to major support around the 1.3700 level. It then proceeded to consolidate around that level before being weighed down even further, this time below its key 200-day moving average. Previously, EUR/USD had not traded below this moving average for more than eight months, since September 2013.
Currently, the breakdown below both the 1.3700 support level and the pivotal 200-day moving average has created a marked disruption of the bullish trend that has been in place for the past 10 months, since the 1.2750-area low in July 2013. Further bearish momentum on this breakdown should target a major downside support objective around the 1.3500 level, which is also around a key 38.2% Fibonacci retracement. In the event of a rebound and recovery to the upside from that 1.3500 support level or higher, the major upside objective remains at the noted 1.4000 level for a potential uptrend resumption.
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.