EUR/USD Forecast: Break below 1.15 psychological mark confirms bearish continuation

The ongoing currency crisis in Turkey prompted deep fears of a possible contagion into other markets and rattled global investors on Friday. Concerns of a spillover effect of Turkey’s turmoil on European markets, given their deep ties, prompted some aggressive selling around the shared currency. Adding to this, the US Dollar strengthened to its firmest level in more than a year and further aggravated the downward momentum. 

The EUR/USD pair finally broke below the key 1.1500 psychological mark and tumbled to a 13-month low. The selling pressure remained unabated at the start of a new trading week, with the pair opening with a bearish gap and weakening farther below the 1.1400 round figure mark. In absence of any major market-moving economic data, the prevalent risk-off mood should continue to drive safe-haven flows towards the greenback and keep exerting selling pressure around the major. 

Even from a technical perspective, the pair on Friday confirmed a bearish break below a short-term descending triangular formation on the daily chart and hence, remains vulnerable to test July 2017 monthly lows, around the 1.1315-10 region. However, near-term oversold conditions, as depicted by daily RSI (14) might hold bearish traders from placing any aggressive bets and help limit further downside, at least for the time being.

On the flip side, recovery attempts back above the 1.1400 handle might now confront immediate resistance near the 1.1430-35 region and any subsequent up-move seems more likely to remain capped near the 1.1475-80 zone.