EUR-USD -- As a follow through on collapse off the 1.5062 level, on Tuesday we saw the pair violating key support at 1.4844, its Sept. 23 high. The threat of further downside is now seen toward the 1.4699 level, its daily-50 exponential moving average and its Oct. 9 low at 1.4672.
The pair's current weakness is coming on the back of its medium-term run off the 1.2456 level to as high as 1.5062 on Oct. 26. With corrective declines triggered, an eventual loss of the 1.4699/72 levels could portend danger toward its long-term trend line at 1.4556.
We envisage this level, if seen, should cap declines and push the pair back up. The daily studies are bearish and pointing lower, suggesting further weakness. A break back above the 1.4844 level is required to reduce the current downside pressure and bring further gains toward its psychological level at 1.5000, with a breach exposing its year-to-date high at 1.5062. Beyond the latter will trigger the resumption of its medium-term uptrend. On the whole, immediate risk remains to the downside near term, having collapsed through the 1.4844 level.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.