Euro Getting Crushed As Dollar Strengthens
PikerTrader | Jan 05, 2015 08:29AM ET
The EUR/USD pair has been getting crushed lately as the dollar has strengthened, even in the face of the euro QE programs. The long-term chart is very very interesting. First this is the EUR/USD 20 year monthly chart, so its a long-term time frame. Today we see the EUR/USD pair heading towards support at 1.1876 which held this pair up in 2009 and a few times from 2003-2006. If this level was the break this pair could really drop lower. The EUR/USD already broke below support 1.22-1.20 which was a base for the last 4 years.
There are two other potential bearish sign with this chart one being that the long-term trend from 2000 has been broken. Full caveat with this is that it has not closed below the trend line, there is still an entire month to go before that happens. Second bearish sign is that huge descending triangle that starts from 2008. The top of the triangle is the downtrend from 2008 when the EUR/USD was at 1.60 to the high at 1.35 of this year. The bottom of the triangle is technically already broken since the EUR/USD pair broke 1.20, but a break of the 1.18 would confirm this triangle break.
Other bearish observations are that the EUR/USD broke below the 200 EMA, the last time this occurred was 1996 a year after the EUR started, which started a 4 year decline.
If this chart is true, it is very possible to see a multi-year decline in the EUR/USD something like we saw in 1996-2000. Potentially sending this pair below parity to .96. This will be great for Americans traveling overseas! Just some food for thought.
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