EUR USD continues trading under pressure

EUR/USD (daily chart shown below) continued to trade under pressure this week, hitting a new two-year low of 1.2356 on Friday, shortly after the US non-farm payrolls report.

This new low follows a sharp plunge that has lasted for more than a week, which brought the currency pair down from a rebound up to 1.2750-area resistance and the 50-day moving average.

EUR/USD has been entrenched in a steep bearish trend since early May. The most significant rebound within this downtrend thus far occurred just last month in October. During that month, price action pulled back up to a high of 1.2886, as well as the noted 50-day moving average, before retreating sharply.

This strong retreat broke down last week below the prior low of 1.2500 that was hit in early October. This week, the plunge extended down to the 1.2450 support target before promptly breaking down below this support level as well.

The next major support target immediately to the downside resides around the 1.2300 level. Any further downside momentum below 1.2300 could prompt the currency pair to decline towards a re-test of the major low around 1.2040 that was hit in mid-2012.

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