11/05/2012 – EUR/USD Breaks Down to 8-Week Low

EUR/USD (daily chart) as of November 5, 2012 has continued its bearish stance off the key 1.3000 resistance level that was reached and respected mid-week last week. This fall from 1.3000, which has just established a new 8-week low for the pair, follows a breakdown of a key uptrend support line extending back to the July 1.2040 2-year low. Price has now followed-through further to the downside to break down tentatively below the important 1.2800 support region, which was also around the level of the 200-day moving average. This bearish breakdown, if price is able to stay below the key 1.2800 level, could further its downside bias towards potential support around the 1.2600 price region. Any move approaching this lower level could seek a continuation of the long-term bearish trend that has been in place since the May 2011 1.4935 high.

James Chen,
CMT Chief Technical Strategist
FX Solutions

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