EUR/USD fell in U.S. trade on Thursday, extending overnight losses from the global session high of 1.1820 on EBS to a 14-session low, with U.S. data, positioning and technicals potentially conspiring to drive it much lower.
Big upside surprises in U.S. August retail sales nL1N2QH2FM and the September Philly Fed Index nN9N2NL01R trumped a small increase in weekly jobless claims, driving U.S. rates US10YT=RREDZ2 and the dollar higher, with the data reinforcing Fed tapering expectations.
The latest CFTC data nL1N2QC2I6 showed investors increased net-long euro positions to the largest since the week ending August 20, raising the risk of a reduction if the single currency remains heavy.
Technicals increasingly highlight downside risks.
EUR/USD trades below the 10-, 21- and 50-Day moving averages as well as the daily cloud.
Daily and monthly RSIs are falling and are not oversold, which implies downside momentum.
The September monthly gravestone doji implies shorts are in control.
EUR/USD looks set to test the 38.2% Fibo of 1.0636-1.2349 as well as August's monthly low.
A break of those supports should see support near 1.1600 tested.
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