The EURUSD is once again testing its twenty-year trend line.
If you use data from the basket of currencies that existed before the euro’s inception in 1999, it’s a level that dates back to 1985.
I can’t overstate the importance of the monthly chart above.
I even went as far as to call it the most pivotal pattern in the euro’s history in my April 14th commentary.
And I stand by that remark.
If the EURUSD breaks the multi-decade trend line in the chart above, we could very well see the euro trade to 0.8300, perhaps even lower.
There’s no guarantee that we will see a break lower and not higher.
Or that a break lower won’t end up being a false move.
But given the way the EURUSD is weighing on support combined with what I see in other markets, a break lower seems much more likely.
Just keep in mind that we could continue to see volatility between 1.0700 and 1.0800 as market participants jockey for position.
As for my position, I’ve been short the EURUSD since 1.0980, which I announced in the Daily Price Action member forums.
I’ve since added to that short twice and will do so again if we get a monthly close below the 1.0700 region.
That’s what it’s going to take to confirm the breakdown, in my opinion.
Sellers would then need to deal with the support area just below the 1.0500 handle, but that would likely be a temporary pause.
As I mentioned to members last week, my longer-term target for the EURUSD following a break below 1.0700 is 0.8300.
That may seem unthinkable to some, but nobody would have imagined oil at negative $40 either.