By Mohammed Isah of fxtechstrategy.com
: The euro-dollar (EUR-USD) currency pair is likely to see further weakness after bearish momentum sent it through strong support in the 1.2142/11 zone and the 1.2000 level to test a low of 1.1954, its lowest level since March 2006.
If the pair heads lower still, its January 2006 low at 1.1801 comes in as the initial support. A violation of that level would open the door for further weakness toward major support at 1.1640 that was established in 2005.
The pair's weekly relative strength index is bearish and pointing lower, supporting our view.
On any recovery from its current price levels, the EUR-USD pair should aim at the 1.2000 level and then the 1.2111/42 levels. These levels should reverse roles and provide resistance, thus turning the pair back down.
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If the pair manages to breach them, however, the next targets will be the June 1 high at 1.2353 and then 1.2451.
Overall, the euro-dollar pair is likely to go even lower now that it has resumed its broader medium-term weakness.
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.