Summary:

• EURUSD falls to lowest level in almost 4 months
• Price threatening to fall back below 1.20
• European bank holidays today

There’s been further weakness seen in the EURUSD today with the most widely traded FX pair sliding to its lowest level since mid-January. Last week’s ECB meeting failed to provide enough for the bulls to hold above key support around 1.2155 and the market has since continued lower. 

 The EURUSD has continued to decline after making a significant break lower following last week’s ECB. Source: xStation

The 1.20 level holds some psychological significance and will no doubt be picked up in the financial press should it be reached, but in reality it hasn’t really acted as an important swing level previously. A symmetrical move lower after breaking 1.2155 would target 1.1755 and represent a 400 pip decline.

By viewing the heatmap on xStation it is apparent that the move lower today is more due to USD strength than EUR weakness – and this is also playing a part in the GBPUSD move. This has been a theme over the past week or so as the rise in US yields seems to have finally caught the attention of the buck and led to a rise in the USD. 

 The move lower today appears to be due more to USD strength rather than EUR weakness according to the heatmap on xStation. Source: xStation

So long as price remains above the 1.1560 level then the longer term breakout remains valid and from this perspective traders may look for bullish reversal signals above there. 

 

 The market remains in a longer term breakout above 1.1560 but could see a pullback towards this region in the coming days and weeks. Source: xStation