EURUSD‘s sizable 445 pip slide following the November 9th U.S. elections, the pair tacked on another 270 pips of losses last week. That amounts to ten consecutive down sessions, a feat that didn’t even occur during the 3,500 pip landslide that began in May of 2014.
However, the pair did come into a bit of support during Friday’s session. The channel that extends from the 2016 high at 1.1615 has a floor near the 1.0570 handle. We’ll find out soon enough if this area has what it takes to break the ten-day losing streak.
Given the extreme bearish momentum of late, I’m only interested in selling opportunities going forward. One such area that could trigger a setup is the January low at 1.0710. Below channel support we have the December 2015 low at 1.0515 followed by the 2015 low at 1.0460.
GBPUSD ended Friday’s session above the 1.2326 handle. This is an area that capped two advances in October and could limit losses so long as the pair trades above it on a 4-hour closing basis.
All of this comes after the November 15th sell signal via the bearish pin bar This break of support was one of two potential opportunities that I mentioned last Monday.
I see no reason to change the bearish outlook for the pound against the US dollar. And unless the tail of the 4-hour bearish pin bar at 1.2513 gets taken out, a move lower from current levels is the likely path forward.
A close below 1.2326 would expose the October lows at 1.2090. Below that we have the flash crash low near 1.2000.
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