FXStreet (Delhi) - Piotr Matys, Research Analyst at Rabobank, suggests that the most persistent EURUSD bears finally got their reward as in November EUR/USD broke lower from the ongoing consolidation marked on our monthly chart, threatening to take the pair towards parity. Key Quotes “Following its precipitous fall from the 1.3993 high set in May 2014 to the 1.0458 low in March 2015, EUR/USD produced fairly sharp swings throughout Q2 and Q3, which was first dominated by the Greece debt saga and later by the turmoil in financial markets caused by the PBoC’s decision to devaluate the yuan.” “While we witnessed a strong rebound to 1.1467 high in May followed by another rally to 1.1714 in August, the predominant downside trend, which started in the second half of last year, prevailed intact.” “It is also worth pointing out that EUR/USD fell below the upside trendline from the March low at 1.0458, which is a valid target in the coming weeks/months. Below this low, the long-term ascending trendline (marked on the monthly chart as a solid line) should offer a fairly decent support as it coincides with the psychological level of 1.00 and the Fibonacci 76.4% retracement. In other words, the parity should be a strong barrier to clear.” “In terms of fundamental driving factors, the monetary policy divergence between the ECB and the Fed is the main source of downside pressure on EUR/USD. The ECB is more likely to increase its monetary policy stimulus in December when the Fed is likely to raise interest rates for the first time since June 2006.” “That said, any delay in a Fed hike accompanied by ECB’s reluctance to boost its monthly asset purchases may not only limit scope for a retracement in EUR/USD, but could trigger yet another squeeze. At this stage the 1.0819 level provides initial resistance followed by 1.09~. Above that, the 1.11~ threshold will be key to watch as a break above this level would indicate that the bears are once again losing their grip on EUR/USD.” For more information, read our latest forex news.