Following the ECB meeting, the euro registered fresh lows at 1.2363, blowing past the low made early in the week at 1.2439. This is the lowest point for the euro since August of 2012 – a pivotal period that turned around the Eurozone sovereign debt crisis.
A possible next target for euro / dollar is the July 2012 low of 1.2040. If the euro takes out that level, a fresh 4-year low would take place.
In such sustained declines such as the euro’s drop from 1.39 of May 2014 to its present 1.23 level, it is always important to check for extreme oversold conditions that may lead to a bounce that would create fresh selling opportunities and re-entry points.
Interestingly, despite the fresh lows, the RSI is not yet at oversold levels as it is above 30 at 34. The MACD is also not at oversold levels and it is giving bearish signals as well (negative, the MACD below the red signal line and trending down).
On the upside, the euro would have to clear the 1.2860-80 area to speak of a meaningful recovery.
Overall the picture for the euro continues to be bearish and even lower lows are likely.