By Russell Glaser
The EUR/USD is under pressure once again with the pair moving closer to key support levels. A breach below these supports may trigger further technical selling.
After a short squeeze pushed the pair as high as 1.3500, the selling of the pair has resumed with the price action contained inside a consolidation zone. The consolidation is evident by the weak ADX of 21 and a flat 20-day simple moving average. While the move lower has not been as active as the month of May at the height of the Greek debt crisis, the downtrend is reemerging.
Since late last week the pair has moved lower between the 38% (1.3370) and 50% (1.3080) Fibonacci retracement levels from the June to November move. A downward sloping line supports the recent price declines. The 50% retracement is the first key technical level in the downtrend.
The second technical support rests at the 200-day moving average that comes in today at 1.3030. This key support is well within reach of today’s trading. A move below this may trigger further technical selling.
Once a breach of the moving average has occurred, the next targets for the pair will be the September 6th high at 1.2920 followed by the 61.8% Fib retracement level at 1.2800.
Forex Market Analysis provided by ForexYard.
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