EURUSD – Update: This week could be a key turning point.

Yesterday’s FOMC release was the catalyst for a sharp fall in the EURUSD, taking it down from a day’s high of 1.3368 to a low of 1.3213. However there is a possibility that yesterday's move carries greater significance longer-term, and could be the early stages of a more significant turning point in the EURUSD towards a more bearish trend.  

Two weeks ago I posted a rather speculative article (what article is not speculative when forecasting markets!) about the EURUSD which I termed ‘Clash of the wedges’ (this can be seen here).  This article favoured a move towards 1.34/35 which would then be a pivotal zone, with the favoured move back lower from there, and possibly much lower if it could start breakin through 1.3000.  

This update adds the weekly chart of the EURUSD to the previous analysis. As you can see this has made a rejection of the upper line of the major EURUSD downtrend in the past week.  I feel that the scenario is starting to favour the downside again, in fact it seems that the fundamental and technical picture may be starting to align - bearishly. A clear break through the recent low at 1.3134 would increase the odds this process is underway, with a meaningful break through 1.3000 hinting at much lower levels over the medium term. The alternate view for upside potential is not completely written-off yet, but I feel that the tide is turning strongly against this option, which would require a solid break through the upper trend-line at 1.3380 to bring this back into play.