EUR/USD Price Analysis: A big level has been broken and the Fib extension puts the next support at 1.16

EUR/USD 4-hour chart

EUR/USD has broken down over the last few session as the US dollar strength persists. After the Fed disappointed markets at the last FOMC meeting, the main hope now rests on the White House to come to an agreement for a fiscal stimulus deal. This does not look like happening any time soon and time is running out as the US election gets nearer. 

The chart is now showing some nice lower high lower low waves on the downside. So far there is not too much to suggest this pattern is not going to continue in the medium term. There is a Fib extension zone (161.8%) at the current price level that could cause some problems. The main level is lower down at the 200.0% Fib extension level. This one matches with the 1.16 level and might provide some more support.

The indicators are very bearish. It is hard to remember a time when the Relative Strength Index hugged the oversold zone in this manner. The MACD histogram is green and the signal lines are extended with a fair amount of separation.

This does look like the trend change that the EUR/USD bulls had been fearing. The main consolidation low is now broken and a deep correction could be in the making. 

Additional levels