The EURUSD is trading sharply lower after breaking below a major technical support cluster defined by the 200-day moving average and the 38.2% retracement of the rally from the February 12 low.
Both levels converged near 1.16806, creating an important barometer for buyers and sellers
Once the pair moved below that zone — and more importantly stayed below it — sellers gained the momentum needed to press the pair lower through the North American session. The next key downside target came in at a swing area between 1.16377 and 1.16464. After breaking below that support zone, the pair extended lower to a session low of 1.16159.
From there, a corrective rebound developed, but the recovery stalled near 1.1655 — a level defined by prior swing lows from April 9 and April 30. The inability to move back above that resistance kept the sellers firmly in control and helped trigger another move back toward the session lows. Buyers did attempt to defend the 1.16159 low, but even that rebound ran into trouble.