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EURUSD

Figure 1 is a weekly chart of the EURUSD cross rate.

Figure 1. EURUSD/ weekly
EURUSD Weekly Chart

This is the same chart I showed several weeks ago when I identified the key pivot at 1.35447. A weekly close below this level has led to a major puke for the Euro. A close below the positive divergence bar (marked in red) appears to have been a clue that the move would be accelerated. (Remember, closes below positive divergence bars often lead to acceleration in prices lower as traders sell losing positions.)

Support now comes in at the 2009 key pivot at 1.25674. There are two positive divergence bars that should also provide support. A weekly close below this level would be further disaster for the Euro.

For now, it appears that the damage to the Euro has been swift, and from this perspective it is too late to short. While the sell off has been surgical like, the clean up from this mess is going to take a long time.

 

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