The trendline support previously held in November and December, but is this a false break?
For the moment, the pair is still hugging the trendline support – though on the lower side of it. The daily close below may not lend much meaning at this point in time as we still have a day full of headline risks – potentially trade and the US jobs report still to come.
The low yesterday was 1.2218, just shy of the 1.2212 support level from 8 Ferbuary. The two key levels to watch out for towards the downside in my view will be the 18 January low @ 1.2265 as well as the 100-day MA (red line) @ 1.2152.
On the two previous occasions when the pair broke the 100-day MA towards the end of the year, the long-term trendline support stemmed the decline before buyers sent the pair higher again.
This time around, that key support level will be out of the equation if a move to the downside materialises. That could open up a move towards 1.2000 if the 100-day MA fails to hold.
Again, watch out for headline risks on trade as well as the non-farm payrolls report later. Those two will be the big risk events on the day for the dollar.