Euro To Continue Downtrend?

The daily barrage of news reports and stories about the Euro currency is nauseating to say the least. The mood currently is extremely pessimistic and for good reason. So far every piece of economic news regarding the Euro zone has been disappointing and the charts are accurately reflecting the doom and gloom. Enough with the chit chat, let's get into the important stuff. A few weeks ago I made a post about how the 1.3400 area might provide a road block for any downside movement and it did. Since that last post, price has closed very convincingly bellow the 1.3400 pivot. Over the past week a very important development has taken place on the technical side of things. The iron clad 1.3400 price pivot zone is now being used as resistance. Remember, prior support once broken becomes resistance! You may ask yourselves, how do we know that the 1.3400 will hold? The answer is nobody knows for sure, but the market likes to leave little clues here and there for the observant traders. The Euro left us with a very nice daily rejection candlestick at the close of Friday's trading session. I have marked the very large rejection candle on the chart bellow for easy reference. I am a big believer in these formation because they illustrate when a stop run takes place. For the neophytes here, a stop run is when the market spikes into an important price level and reverses instead of continuing in the initial direction. This is how this rejection dynamic manifests on the chart, and it is very often a precursor to a reversal. The downtrend for the Euro has been a very strong for the last few weeks and as of right now it looks like it may continue. Bearish momentum will be confirmed IF the low of that rejection bar breaks with conviction.