EUR USD slide poised to resume

EUR/USD (daily chart shown below) has attempted a modest rebound on Monday following Friday’s precipitous slide to a new two-year low around 1.2500. That drop was exacerbated by the better-than-expected non-farm payrolls report and unemployment data coming out of the US.

While Friday’s plunge was deep, it was only one of many similar declines that have plagued the currency pair since the fall from its multi-year high near 1.4000 in early May.

The decline since that May high has been mostly sharp and steep, especially since the drop from 1.3700 resistance in early July. More recently, the dive below 1.3000 about a month ago in early September was especially strong and steep.

With the past several months displaying a near-vertical plunge below many key support levels, including the major 1.2750 level over a week ago, the directional bias for the currency pair remains bearish.

The next major support target to the downside resides around the 1.2450 level, last hit over two years ago, followed by the 1.2300 level. Tentative, short-term resistance to the upside on any continued rebound now resides around the 1.2650 level.

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