A drop to 2021 lows remains on the table

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  • EUR / USD picks up again after breaking above the 1.2100 region.
  • A deeper pullback could hit the 2021 low at 1.1952.

The EUR / USD pair retraces Tuesday’s decent advance and shifts its focus back to the downside to a possible retest of the 1.2000 region.

Even though the current weakness is considered temporary, it could extend further and attempt to revisit the yearly lows around the 1.1950 region (recorded in early February) if the 1.2000 level is broken sustainably. Below yearly lows, selling pressure is expected to accelerate, exposing the next target at a Fibonacci retracement at 1.1887.

In the bigger picture, the constructive stance in EUR / USD remains unchanged as long as it remains above the 200-day SMA, today at 1.1799.

Looking at the monthly chart, the (solid) breakout of the 2008-2020 line is a big bullish event and should support the continuation of the current long-term trend.

EUR / USD daily chart

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EUR / USD technical levels

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