EURUSD threat to key monthly low from 2003 at 1.1381

A head fake bounce through minor resistance at 1.1639/50, but a stall ahead of trend line resistance, now 1.1705 to leaves risk for a roll back lower to the basing range and to leave a negative bias for latter January.

The push to yet another new setback low Friday reinforced the break Thursday below the 2005 low at 1.1641 that pushed EURUSD to its lowest level in 11 years!!

This has fully rejected the prior basing effort from last week and reinforces bigger picture bearish pressures from the prior plunge through 1.1876, the 2010 low and previously through the 2012 low at 1.2042, that in turn enhanced the December breach of the key neckline supports from 2010 and 2005 (see the Monthly chart).

Short-term Outlook - Downside Risks:

• For latter January the threat is to a monthly low from 2003 at 1.1381

• For Q1, the risk is now to the 61.8% retrace of the entire 2000-2008 rally at 1.1210!!

Longer-term Outlook - Downside Risks:

• For Q1, overshoot risk is maybe as low as the September 2003 key swing low at 1.0765.

• For 2015, the threat is to PARITY and just below, .9900, the 78.6% retrace of the entire 2000-2008 bull rally.

Momentum: The 8-day RSI, short-term momentum has corrected from OS and leaves scope to go lower this week.

What Changes This? Above 1.1787 eases bear risks; through 1.1872 signals a neutral tone, only shifting positive above 1.2121.

For Today:

• We see a downside bias through 1.1540 for the recent 1.1460 low; violation would aim for key 1.1381.

• But above 1.1680 opens risk up to the trend line (1.1705), which we would look to cap. Break targets 1.1787.

Monthly EURUSD Chart

2 Hour EURUSD Chart