EUR USD consolidates steep decline

EUR/USD (daily chart shown below) has begun consolidating its recent steep declines as it prepares potentially for a further plunge.

After having dropped sharply during the past week and a half down to a low around the 1.3150 intermediate support level on Wednesday, establishing almost a one-year low in the process, the currency pair has consolidated its losses and made a slight relief rebound.

Even in the event of a higher rebound, the strong bearish trend that originated from May’s multi-year high of 1.3993 should continue to remain firmly in place.

Within the course of this bearish trend, EUR/USD has broken down below multiple key support levels, including 1.3500 in late July, 1.3300 about a week ago and most recently, the 61.8% Fibonacci retracement level of the strong bullish trend from the July 2013 low up to the noted multi-year high in May.

The major moving averages, including the 50-day and 200-day, are all pointing sharply to the downside.

The next key downside target resides around the 1.3100 support level, last hit in September of 2013, followed further to the downside by the major 1.3000 psychological support level.

Any further upside rebound in the near-term should be limited by the 1.3300 resistance level.

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