EURUSD has been in freefall since the beginning of October. After testing the 1.12 resistance twice and forming a double top pattern, it fell below 1.08 in just one month. Why is the Euro losing value? At 1.12, EURUSD was overpriced and overextended with weak fundamentals. The Eurozone economy is lagging behind the US economy, the Trump presidency poses significant risks to the Eurozone, and political turmoil in several Euro countries, combined with crowded long Euro positions, were some of the key factors driving this sharp decline. 

(EURUSD Monthly Chart) 

The main long-term trend began in 2008 and has been continuing for 16 years. This trend was one of the reasons behind the sharp selloff, as it presented a fantastic opportunity for long- and medium-term traders. As long as the trend remains intact, the downward pressure is likely to continue. However, a retreat of over 4% in less than one month was a significant drop for EURUSD, suggesting that a correction may be needed before the pair determines its direction in the final days of the year. 

(EURUSD Daily Chart) 

EURUSD has already reached the daily uptrend line, which might be an ideal area for the Euro to show a positive reaction to the recent sharp selloff. The momentum of the decline has slowed, and the currency pair has entered a consolidation phase just above the trendline.  

Support and Resistance Levels for EURUSD 

If EURUSD begins a correction here, the 1.0825, 1.0840, and 1.0870 levels will be key levels to watch for a potential reaction move. A correction to 1.10 would be an ideal target before the downward trend resumes. The 1.0760 level is the major support to monitor for EURUSD in the coming weeks.