EUR/USD Aims for the New Long-term Lows

The price successfully broke major supports and is free to reach new long-term lows.

It all started two weeks ago, when the EUR/USD broke major resistances, creating hope for buyers. As we later found out, that breakout was a false one (red) and at the beginning of the previous week, the EUR/USD came back below those resistances, crashing the whole bullish dream.

False breakouts are usually amazing signals to trade in the opposite direction. It’s not different in this case either.

In addition, the price created a flag pattern (black) and today, we finally managed to break its lower line. That is the last piece of the puzzle. The price is back below the down trendline (blue), back below the 1.138 resistance (yellow) and now, below the lower line of the flag. All is set for a further bearish slide.

“Buy the rumors, sell the facts”, did you hear that one before? This can be a factor that can derail the bearish plan though. Currently, the USD is being bought in anticipation for the FOMC. Once, the Federal Reserve (Fed) delivers what is generally expected, we may see the “sell the facts” part of this quote, which in the case is of the EURUSD would mean an upswing. As always, we’re about to find out what’s going to happen but as for now, technically sellers are in a much better position.

For a look at all of today’s economic events, check out our economic calendar.