As noted back on Feb 21, the EURUSD has broken down from its rising channel (white) and accelerated to the downside, breaking the Jan 4 1.2996 low and the psychologically important 1.30 level.
This channel dates all the way back to Dec 06. Reaching the top for the third time is still possible, of course, but it’s that much harder now that the pair needs to retake the higher channel line and mount a fresh attack. Suppose it doesn’t?
I’ve redrawn the falling white channel as red and will lower its top (for now) to reflect that possibility. I’ve also sketched in a more relaxed rising channel (light blue) that reflects potential channel support at current prices (the intersection of the falling red .75 and the rising light blue .25.)
I don’t know whether the pair needs to retest the falling white midline or not. The bottom of the new light blue channel intersects with the red .75 in mid-March. Also there is the .25 of the very large rising purple channel, which provided a huge bounce in Jun 2010. It’s easier to see in the LT chart below.
Here’s the really big picture.
The huge rising white channel seems to matter quite a bit. Note the support it offered from Aug 93 – Jan 97. When it broke, the pair fell precipitously to the midline, shedding .15 in about six months.
The midline offered support again through Feb 99, then completely fell out of bed (equities maxed out in Mar and Aug 2000.)
EURUSD spent 18 months in the penalty box confirming the channel bottom until finally breaking out early in 2002. It nearly reached the midline again two years later, and spent almost 4 additional years grinding higher – reaching 1.60 at a little over the 1.618 before zigzagging lower to its present level.
To be continued…