EUR USD hits new nine year low

EUR/USD (daily chart shown below) has hit a new nine-year low in the midst of a plunge that has accelerated in the beginning of 2015. Not since the end of 2005 has the currency pair fallen to such depths.

The New Year started with a dramatic gap down in price that broke below its 1.2040 downside support target, which was the pivotal low established back in mid-2012.

Since the 1.4000-area high reached in May of last year, EUR/USD has followed a steady and accelerating bearish trend that has seen the currency pair fall by around 16% thus far within the span of eight months.

Despite technical indications that EUR/USD has recently been oversold and overextended to the downside, especially with the dramatic drop in the very beginning of the year, the prevailing trend continues to be significantly bearish.

While a relief rally may be in store for the currency pair to correct the recent overextension, the next major downside support target resides around 1.1640, which was the pivotal low hit in late 2005.

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