A shallow correction is all the euro could manage earlier this month and since then, the dollar has been back in control.
The pair finally made new lows today which could potentially be the catalyst for much larger losses. But major support lies beneath.
The 200/233-week SMA band sits a little below 1.16 and a break of this would be a significant bearish signal, taking the pair below major support from late last year in the process.
This would then take the pair into big Fibonacci territory, with the 50% retracement – March 2020 lows to January 2021 highs – falling just below 1.15 and the 61.8% retracement a little below 1.13.
We may be getting ahead of ourselves though as the momentum indicators on the daily chart appear to suggest that breaking 1.16 could be a tall order, at least at the first attempt. Further divergence on approach will further support that view.