The market has been pushing lower aggressively after breaking below major DEMAND LEVELS around 1.2000 and 1.1860 where historical bottoms were previously established back in 2012 and 2010.
Further actions from the ECB regarding QE are still doubted due to the ECB’s policy meeting on January 22. EUROZONE current account stepped down to €18.1 billion which is eight-month low.
All of this is strongly affecting the market leading to the current long-term negative sentiment of the EUR/USD pair. Moreover, today, the U.S. markets are closed for celebration of Luther King Day.
The pair has lost almost 490 pips since the beginning of 2015, as the market has revisited the lowest rates since November 2003.
The market currently looks oversold below the price level of 1.2000 and 1.1900 (prominent psychological SUPPORT and the lower limit of the movement channel on the H4 chart).
Currently, SELLING the EUR/USD pair should be avoided as much as possible at such historically low prices.
On the other hand, BUYING the pair is considered a low-risk opportunity but with low probability after such strong bearish trend. That is why bullish pullback should be anticipated looking for better prices to sell the pair off.
The price zone of 1.1750-1.1820 is the recently established SUPPLY zone. Short-term SELL positions can be taken there. Stop loss should be placed above the price level of 1.1880.
The material has been provided by InstaForex Company - www.instaforex.com
