By Mohammed Isah of fxtechstrategy.com
: After violating the 1.4044 and the 1.4000 levels this week, the euro continued to weaken vs. the greenback. It's now seen targeting its July 8 low at 1.3831 and the 1.3747/1.3733 levels, its June 16 low/.50 retracement (1.2328-1.5143 rally).
A chart of the currency pair is
A decisive violation of the latter level will call for further downside weakness toward the pair's .61 Fibonacci retracement/May 18 low at 1.3422/1.3409, where a cap may be seen that would trigger a recovery higher.
Both the weekly and daily studies are bearish and pointing lower, suggesting further weakness.
If a recovery is triggered, the pair will target its invalidated psychological level at 1.4000 ahead of 1.4028/44, the Jan. 21/Aug. 17 lows.
We expect a combination of these two levels to reverse roles and provide resistance, thereby turning the pair lower again.
Further out, upside objectives are located at the Jan. 25 high at 1.4194 and the 1.4216/1.4262 levels of Dec. 22/Jan. 8.
Overall, having triggered the resumption of its short-term downtrend, risk of further downside pressure remains toward the 1.3831/1.3747 levels or even lower.
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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 also produces
for his subscribers. 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.