EUR-USD: Remains Vulnerable to Weakness

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( fxtechstrategy.com) -- Despite a one-day recovery on Monday, the euro-dollar currency pair remains vulnerable and faces further downside weakness.

On the downside, EUR-USD's initial support lies at 1.3078, where a violation will call for a run at 1.2975.

A breach of that level will set the stage for further weakness toward 1.2930, the Jan. 25 low.

EUR-USD's daily relative strength index is bearish and pointing lower, supporting this view.

The alternative scenario will be for the euro-dollar currency pair to return to more than 1.3484, its Dec. 5 high.

This would resume its uptrend and set the stage for a push toward its Dec. 2 high at 1.3547.

A breach of that level would leave the pair to target its weekly 200-day exponential moving average at 1.3642.

All in all, the euro-dollar currency pair remains vulnerable to the downside on bear threats.

-- Written by Mohammed Isah.

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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 The Professional Suite 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.