EUR/USD recently broke below a key support zone around the bottom of the rising channel on the 1-hour time frame and the 1.3800 major psychological level. This could be indicative of more losses for the pair, but a quick retracement might take place before the selloff carries on.
Stochastic on the 1-hour chart is already moving down from the overbought area, which means that sellers are in control. However, the pair could still pull up to the 1.3800 area, which is an area of interest around the broken channel.
Shorting at 1.3800 with a stop back inside the channel or above the 1.3850 level and a target at the next support area near 1.3650 could yield a 3:1 return on risk.
By Kate Curtis from Trader’s Way