The market is interpretting ECB Trichets comments as being less hawkish than prior. That and an increasingly more bearish bias is sending the EURUSD lower.

From a technical perspective the price is below the 100 (1.3738 – 1) and 200 hour (1.3704 – 3) MAs, below the 1.3743 level (61.8% of the move down from the November 2010 high to the low -2) and is now below a trendline connecting the Jan 19th low to the low on January 31st. That level comes in at the 1.3672 level currently (at 4). All these levels now become resistance levels for the pair.  These are borderline levels to trade against on corrective rallies.

Targets on the downside not focus on the 1.3627-39 area which was an area that the market used as support and resistance from Jan24th to Jan31st.

When you get a sharp move to the downside, it is also a good idea to measure short term retracements from the move down. ON the 5 minute chart below, the move down from the 8:30 release/events has the 38.2% retracement of the move coming in at 1.3698.

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