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Another new setback low Thursday as anticipated to hit our next minor target 1.1760 and leave bias for further erosion through mid-month and for January.
But the Friday bounce sees an upside bias for Monday.
The prior plunge through 1.1876, the 2010 low reinforced previous negative pressures from last Friday through the 2012 low at 1.2042, that in turn enhanced the December breach of the key neckline supports from 2010 and 2005 (see the Monthly chart).
Short-term Outlook - Downside Risks:
- We see downside bias for the 2005 low at 1.1641 into mid-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 lows.
- We see an upside bias for 1.1897 and 1.1925, maybe towards 1.1957/77, which we would look to try to cap.
- But below 1.1822 opens risk down to through 1.1763/54, with threat to 1.1700.
Monthly EURUSD Chart
2 Hour EURUSD Chart