A mid-December bullish recovery failure back from ahead of chart resistance at 1.2600 set up a bearish extension to a new cycle low through the holiday season to maintain negative pressures for early January.
Moreover, the early 2015 plunge on Friday pushed through not just the 2012 low at 1.2042. but also reinforced the December breach of the key neckline supports from 2010 and 2005 (see the Monthly chart).
This morning's plunge through the psychological/ option target at 1.2000 has hit a next notable target at 1.1876, the 2010 low.
Short-term Outlook - Downside Risks:
- Below the new low at 1.1861 targets the 2005 low at 1.1641 into January.
- For Q1, the risk is now maybe as low as the 61.8% retrace of the entire 2000-2008 rally at 1.1210!!
Momentum: The 8-day RSI, short-term momentum is OS, but we still see scope to go lower this week. Momentum is confirming the new low.
- We see a downside bias for 1.1861, with threat to 1.1805/00.
- But above 1.1977 aims for 1.2005 and opens risk up to 1.2035, which we would look to try to cap.
Monthly EURUSD Chart
3 EURUSD Hour Chart
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