EURUSD: With a failure to hold on to its intra day losses sending the pair higher to close at 1.2305 on Wednesday, price exhaustion following its decline off the 1.2466 level, its Jun 21’10 high may have set in. On a follow-through on those gains, EUR should head towards retargeting the 1.2466 level where a break will set the stage for more strength aiming at its May 21’10 high at 1.2671. This view remains valid while the pair continues to trade above the 1.2000/1.1875 zone. Alternatively, on a return below the 1.2208 level (Jun 23’10 low), downside threats will develop towards the 1.2162 level, its Jun 14’10 low with a loss of there opening the door for further weakness targeting the 1.1875 level, the 2010 low. A firm break and close below there will have to occur to annul its corrective recovery bias and bring further weakness towards its Jan’2006 low at 1.1801 with a violation of there setting the stage for more declines towards its major support at 1.1640 established in 2005. All in all, though still retaining its broader bearish bias, consolidation to corrective price action continues to shape up.
