CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Bearish pressure continues to weigh on EUR USD

Article By: ,  Financial Analyst

EUR/USD spent much of the month of February in a relatively tight consolidation just off the new eleven-year low of $1.1100 that was hit in late January. On a rebound from that low extreme, early February saw the currency pair hit a high of $1.1533 before retreating and spending the rest of the month essentially range trading.

In the course of February’s trading range, EUR/USD has formed a clear consolidation pattern within a steep, ten-month bearish trend. This downtrend has pushed the currency pair dramatically lower by more than 20% from its long-term high just short of $1.4000 in May of 2014 down to the noted $1.1100 low in late January.

The current consolidation has formed a rough triangle or pennant pattern near the long-term lows. Coupled with EUR/USD’s continuing downside trend pressure, this pattern hints that the currency pair could well have significantly further to fall in the near future.

With continued euro weakness and only a relatively modest respite in US dollar strength as we near the end of February, bearish pressure continues to weigh on the EUR/USD pair.

The month of March should likely see either an extension of the current consolidation pattern or a clear breakdown below the long-term lows. In the event of the former scenario, major upside resistance on any further drift higher within the consolidation stands firmly around the key $1.1650 level. In the latter setup, any sustained breakdown below the noted $1.1100 support level could see a further decline and trend continuation targeting the key 1.0800 objective to the downside.

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