EURUSD: Takes Out Key Support, Eyes More Weakness.

EURUSD: The pair has broken and held below its key support at the 1.2822 level. You will recall we have been watching that level for a long time.  We see two things happening.  One, EUR will have to hold below this support to validate its break and second, a failure to hold below here could mean further upside offensive could follow.  If the former plays out, expect further declines towards the 1.2755 level. We expect a cap to occur here and possibly turn the pair higher again. But if broken, expect further declines to develop towards the 1.2625 level. Its daily RSI is supportive of this view. On the upside, resistance resides at the 1.2822 level where a reversal of roles could occur. However, if this fails, further upside should build up towards the 1.3000 followed by  the 1.3171 level. A breach of here will resume its broader uptrend towards the 1.3282 level with a cut through here calling for a move further higher towards its weekly ema at 1.3415 level. All in all, EUR faces further downside threats.