Following a night of incredible price action in sterling, we will let that market settle and focus upon some of the other more consistent charts.
EUR/USD breaks below crucial support level
EUR/USD has been working out really well of late, with the weakness we have been looking out for coming into fruition. The past 24 hours have seen the pair break both the $1.1138 and $1.1123 support levels, with the latter of particular importance. The bottom of a two-month descending triangle pattern is represented by $1.1123, which means we look set for a period of further weakness for the pair.
The retest of this level as new resistance adds further confidence of a continuation of this trend, with the only relevant support level in view coming at $1.1046 (August low).
Yes, this sell-off could be deemed extended given momentum indicators and alike, yet the most important thing is price action and that continues to say sell. As such, further downside seems likely as long as we do not see a break back above $1.1125.