Sat, Dec 04, 2021 @ 16:07 GMT
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EUR/USD Continues To Make New 15-Month Lows

EUR/USD continues to make lower lows and lower highs. And that, by definition, is a downtrend. However, it may not have as much to do with the Euro, and it has to do with the US Dollar. The US Dollar Index broke out of a short-term symmetrical triangle near 94.40 and is desperately trying to push above a long term trendline (red) dating back to 2011. Price halted at the trendline, hear 94.56 as it moves towards the September 24th, 2020 highs of 94.76.

EUR/USD makes up 57% of the US Dollar Index (DXY), so it’s no surprise that as the DXY pushes towards new highs, that EUR/USD is moving in a similar, but opposite, direction. Today, the pair reached a low of 1.1524 thus far, its lowest level since July 21st, 2020. Price formed a double top near 1.1905 back in August and September, and finally broke lower on September 29th. The target for the double top is near 1.1400, however price must first pass through strong support between 1.1490 and 1.1515, which is:

  • The 161.8% Fibonacci retracement from the August 20th lows to the September 3rd highs
  • The 50% retracement level from the March 2020 lows to the January 6th highs
  • Horizontal support dating back to spike highs from March 2020

On a 240-minute timeframe, the downtrend is much more noticeable within the channel. In addition to the support mentioned above as price moves towards the double top target, there is also currently support at the bottom trendline of the downward sloping channel near 1.1460. Resistance is above at the top downward sloping trendline near today’s highs of 1.1570. If price breaks above, there is resistance at the neckline of the double top near 1.1665 and then the 50-Day Moving Average (see daily) near 1.1730.
DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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