By Mohammed Isah of fxtechstrategy.com
: The pair looks set to build on the past week's weakness after it backed off higher prices ahead of the 1.4625 level, its Nov. 3 low, and broke back below the 1.4446/79 levels.
To view a chart of the pair
This has increased downside risk toward the pair's psychological level at 1.4300, with a turn below there turning focus to the Jan. 8 level at 1.4262. Below that, the next target would be the year-to-date low at 1.4216.
This view is consistent with the short-term declines triggered off the 1.5143 level.
An invalidation of the 1.4216 level will resume the short-term downtrend toward 1.4176, the Sept. 1 low, with a break there accelerating further downside weakness toward 1.4044, the Aug. 17 level, and subsequently the big psychological level at 1.4000.
The daily RSI is bearish and pointing lower, suggesting further weakness.
However, if the euro is able to fend off the current bear attacks and return above the 1.4446/79 area and then break and hold above the 1.4625 level, further upside threats could be seen toward 1.4799, the Nov. 20 high, or even higher.
On the whole, with a return back below the pair's key resistance at 1.4446/79 seen, further downside threats are expected toward the 1.4262/16 levels.
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.