This, however, is not just any trendline, its a trendline that originates from the double top pattern in 2009, when the EUR/USD rejected near 1.60, marking all-time highs for the single currency. The long-term falling trendline also bisects the terminal points in 2011 & 2014, when the EUR/USD also failed near critical psychological big figures at 1.50 & 1.40 respectively. And with the market probing the 1.25 handle, it seems that 1.2617/33 may be the only barrier that guards the possible route to 1.30.
With the Dollar Index having recently broken down through the key 90 threshold, the greenback does not seem to have declined to key support versus anything, with exception to gold , which is bumping up against last year's highs. Typically, forex markets tend to overshoot targets, and in this case if this 1.2617/33 region can somehow cap price-action on a weekly closing basis, then we could potentially look back and say that this was the moment when the EUR failed to clear 1.25, rejecting at another psychological big figure.
The most likely outcome, however, given the momentum in the currency market and the heavy LONG exposure large (non-commercial) traders to the euro, is a pause or a period of consolidation for the beaten down US dollar . That said, keep an eye out for (EUR/USD) the 1.2617/33 region, in ultimately deciding how much further the USD can decline.
