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EUR/USD Threatening the Low on the Year

Last week, EUR/USD broke a key support around 1.1270. This was essentially the central pivot of a consolidation range between roughly 1.11 and 1.15. After the break down, price stalled a bit around 1.12, but continued to slide during the Wednesday (3/4) session.

Today, it is falling further and threatening the 1.11 low on the year.

EUR/USD 4H Chart 3/4


(click to enlarge)

Now, with the ECB and NFP ahead, we should probably expect support here around 1.11. Even if EUR/USD does make a new low on the year, we should anticipate some consolidation ahead of the risk events. If during this consolidation, price holds under 1.12, it would reflect bearish bias building up ahead of the ECB/NFP even risks.

If after the ECB statement and the NFP report, EUR/USD rebounds, let's watch the 1.1250-1.13 area. If resistance holds here, the EUR/USD will continue to carry the bearish outlook, with the 1.10 level in sight and eventually the parity (1.00) level. A break back above 1.13 however would indicate further consolidation, and open up the consolidation highs around 1.15 again.