euro remains technically and fundamentally weak 1234652015
EUR/USD spent the first half of March in a virtually unrelenting free-fall, extending its deeply entrenched bearish trend further to the downside to hit successively lower targets at 1.1100, 1.0800, and then 1.0500.
That very sharp decline confirmed a clear continuation of the steep downtrend that has been in place for the past ten months, since the May 2014 high near 1.4000.
The original 1.0800 objective for March was hit in the first several days of the month, and the deeper 1.0500 target was quickly reached by mid-March, which established a new 12-year low for the currency pair.
After EUR/USD hit and dipped slightly below 1.0500, however, it quickly began a rebound in the middle of March that was buoyed further by the US Fed meeting on March 18, which resulted in a quick plunge in the US dollar.
That EUR/USD rebound hit a high of 1.1037 on the day of the Fed meeting before retreating modestly during subsequent trading days.
Despite March’s sharp, dollar-driven rebound in the currency pair, the euro remains technically and fundamentally weak. Furthermore, as we near the end of March, the dollar is showing signs of exhausting its recent pullback.
Going into April, if the euro continues its longstanding weakness as expected and the dollar resumes any degree of bullishness, EUR/USD should continue its recently-interrupted downtrend towards lower lows.
As of the last full trading week of March, major resistance resides at the key 1.1100 level, where the 50-day moving average is also currently situated. If EUR/USD continues to trade under this major resistance area, the currency pair should likely re-target 1.0800 and 1.0500 to the downside once again. On any breakdown below 1.0500, which would confirm a continuation of the current downtrend, the next major downside objective resides around the 1.0200 level.
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