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EURUSD Daily: Euro slides to 9-year low of 1.1859

XM Markets UUIIFXBR
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The euro marked its lowest point since March of 2006 today, after a break of the 1.20 key psychological support level also led to the violation of the 2010 low of 1.1875.  The collapse was caused by stop-loss orders that were triggered when 1.20 gave way.

In just 2 trading sessions in 2015 so far, the euro has dropped from 1.21 (where it ended 2014) to 1.1860.  The pair is potentially eyeing the 1.16 level, which was the 2005 low.

For the moment the euro is oversold and price action is vulnerable to sharp corrections, as today’s bounce from the 1.1859 low to 1.1958 showed.

The 14-day Relative Strength Index is oversold but not excessively so at 25.9 and the MACD is also giving negative signals.  The trend for the euro is lower but fresh euro shorts should pay close attention to their entry points so as not to get caught in any negative correction or reaction.

 

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