EURUSD Shows Signs of Weakness as It Breaks Rising Trendline

Summary:

EURUSD broke the rising trendline and now threatens to break lower. A close below the 1.2150 area is key for bears wating for their turn.

Once again, buyers stepped up on the EURUSD move lower and propelled the pair from the key 1.2150 area. Only a break and close below that area should signal extensive weakness moving forward. However, the drop yesterday managed to break the rising trendline that started back on November 3^rd, the Election Day in the United States.

At this point in time, considering the Christmas break and the lack of liquidity in the markets typical for the last trading days of the year, the risk is that the EURUSD pair consolidates above the 1.2150 level. We may also imagine a head and shoulders pattern, with the pair hovering above the level. However, if it manages to break and close below on a daily basis, bears may want to sell for the next support level seen at 1.19.

Brexit negotiations remain key for the Euro at this time of the year. Any news out of the negotiations front may trigger a significant reaction, and that is the risk to consider by both bulls and bears.

EURUSD Technical Analysis

The technical picture shows EURUSD trading with a heavy tone. Now that it broke below the rising trendline, it retested it, a typical move before an extended leg lower.

Bears may want to sell a close below 1.2150 with a stop at 1.2250 and a target below 1.19.