EUR-USD: More Declines Seen

EUR-USD: This week the pair swept through key support levels at 1.5000, an important psychological level, and then 1.4844, the Sept. 23 high, to close lower Friday at 1.4715.

There's potential for further declines toward major support at 1.4615. That's where the pair's long-term rising trend line is located. If this level is tested, we would expect it to provide a strong defense and turn the pair back up again.

However, if that level does not hold, price acceleration could be seen toward the Oct 2 low at 1.4479. A snap below there would bring the Aug. 5 high of 1.4446 into focus. We envisage that a cap could be seen at these two levels.

The pair's weekly relative strength index is bearish and trending lower, suggesting further weakness.

In order for the pair to reduce its current downside risk, it must break back above the 1.4844 level to signal a follow-through higher toward the 1.5000 psychological level. A break there will expose the year-to-date high at 1.5062. This level remains the trigger for the resumption of the pair's medium-term uptrend, which is currently on hold.

Overall, with the pair triggering corrective declines and violating key support levels, risk is building for it to target 1.4615, where the long-term rising channel is located.