In the days since the FOMC decision the euro has broken below the key support at $1.2245 to move to a new low dating back to mid-2012. The way is now open towards a test of the crucial July 2012 low at $1.2040 again. The momentum indicators are weak and the outlook suggests that rallies should be seen as a chance to sell. However these markets do not tend to move in a straight line and there are likely to be minor retracements along the way. The initial resistance is around $1.2300 and then at $1.2350. The intraday hourly chart shows negative configuration on MACD whilst the RSI is also unwinding from a stretched position. Late December can mean that markets become quite thin and movement more volatile, but I still expect the euro to continue lower in due course.
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