The EURUSD, which bulled to a peak at 1.1467 late in the day on May 15, having a bearish position at 1.1062 early today. While the extent of the drop (-3.5%) may not seem like a lot to an equity trader, it is a large move in 2+ trading days for a forex market that trades with leverage. It is not so much the extent of the move down that should be unsettling but the pace as it reflects a symptom now plaguing just about every global market, liquidity.
As the daily chart above shows, the breakout for the move to 1.1467 was 1.1052, a level that needs to hold to keep the fading risk of 1.15 on the radar. Ahead of that level are two supports, 1.1130 (broken) and 1.1065 (tested, low 1.1062). These are the technical levels that would need to hold to keep the market from testing 1.1052. A firm move below 1.1052 would break the back of what still can be viewed as a correction from a low at 1.0457 and prove fatal to those hoping to see 1.15+. Any move below 1.1052 would need to be confirmed by a firm break of the daily trendline (currently 1.1010).
