EUR/USD – oh euro where art heading thou?

Recap: the single currency is in a long-term downtrend versus the greenback since July 2008, where the euro hit its all-time high at USD1.6063. In the last three months of 2014 trading became more volatile and we even saw a breakout over the latest resistance line (red) where the currency-pair managed to stay for a short while before being sold off again. After closing below the established support (pink) for three consecutive days at the end of 2014, we saw a massive slump in the first days of 2015. The downward resistance line (green) steepened again as the single currency continued to decline versus the greenback.

Today, after the Greek snap elections took place on Sunday where the anti-austerity party Syriza scored a win, the single currency hit a new 11-year low at USD1.1097 during the Asian session but the euro could recover, gaining as much as 150 pips. Technically we are overdue for some kind of retracement or at least a phase of stabilization which could easily take place without breaking the new established steeper resistance line (green). In the overall picture, even though minor pullbacks have a high probability, downward momentum is likely to persist.