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EUR/USD Pushes Below 1.29; 61.8% Retracement in Sight

The EUR/USD has a double whammy of bearish factors. While the ECB cut rates and has intentions of further stimulus, the FOMC is considering a rate hike some time around mid-2015. 

Last week EUR/USD fell after the ECB statement and press conference. It stalled on Friday after a poor NFP reading of 142K. The pair rallied from the 1.2920 low. However, the bullish correction was brief, holding below 1.30, and we saw a sharp bearish break today (9/8) below last week's low and below the 1.29 handle.

(EUR/USD 4H Chart 9/8)

Where will this bearish trend finally find support? When we look at the daily chart, we see that the descent is accelerating despite the RSI being in oversold territory. We can also see that there is some room until key support/resistance area between 1.2745 and 1.28 (you can see it as resistance in June 2012). This area also contains the 61.8% retracement of the 2012-2014 rally. This could be finally the area where EUR/USD stalls and gives us a meaningful consolidation. However, as long as there is divergence between the FOMC and ECB, there is no reason EUR/USD can't continue even lower. The 1.2042, 2012-low, is not out of the question.

EUR/USD Weekly Chart)