EUR/USD’s reversal from the 1.2285 mark mid-Friday confirmed the formation of a new descending channel. The increasing strength of the bearish sentiment was apparent later in the day when the Euro tried to surpass a significant support area formed by the 100– and 55-hour SMAs and the monthly R2 circa 1.2225. Any attempt to edge lower was interrupted when the pair opened 54 pips higher in this session which was followed by a re-test of the aforementioned support. This day is quiet in terms of fundamentals; however, political events, especially the US turmoil over government shutdown, are likely to drive the market. Technical indicators confirm that there is still some potential south, possibly down to the 200-hour SMA and the weekly S1 at 1.2150, that could be realised today.
