The EUR/USD is continuing its bearish march, taking out the 1.1700 handle. Following Wednesday’s daily Doji candlestick pattern, forex players have piled on to the short side of this market. For now, a key long-term support area is coming into view.

On the economic news front, it was a fairly light morning. Wednesday’s headlines revolved around the FOMC Minutes and Fed tapering. Today’s headlines are much less impactful:

Event                                                                      Actual                       Projected                  Previous

Continuing Jobless Claims                                  2.820M                        2.800M                     2.899M

Initial Jobless Claims                                             348K                              363K                         377K

Philly Fed Manufacturing Index (August)            19.4                               23.0                            21.9

At this point, the weekly jobless claims figures aren’t being viewed by EUR/USD traders as overly important. But, they are down modestly week-over-week, which is positive. On the other hand, the Philly Fed Index disappointed expectations in August. The lagging performance is attributable to commodity supply chain disruptions and labor shortages.

For the EUR/USD, the trend is down. Let’s dig into the long-term technicals and see if we can spot a trade or two.

EUR/USD Posts New Yearly Lows

In a Live Market Update from 6 July, I broke down the importance of the March 2021 low at 1.1704. After experiencing a nice bounce from this level, the EUR/USD has established itself under 1.1700.

Bottom Line: Typically, long-term technical levels set up nicely as support or resistance. In this case, the weekly Double Bottom (1.1602-1.1612) from fall 2020 is such a level.

Until elected, I’ll have buy orders queued up in the EUR/USD from 1.1619. With an initial stop loss at 1.1564, this trade produces 55 pips on a standard 1:1 risk vs reward ratio.