EURUSD: With EUR taking back its corrective recovery gains and selling off strongly during Wednesday trading session, risk of further downside weakness is likely to continue. This will leave the pair vulnerable to the downside towards the 1.3242 level, its Oct 06’2011 low and then the 1.3144 level, its Oct’2011 low. It present weakness is coming on the heels of a break of the 1.3419 level, its Nov 17’2011 low and its Oct 10’2011 low at 1.3377. A loss of the 1.3144 level will resume the pair’s medium term downtrend toward its big support standing at its psycho level at 1.3000. Its daily RSI is bearish and pointing lower suggesting further weakness. Alternatively, on any recovery, the pair will to break the 1.3419 level, its Nov 17’2011 low and then take out the 1.3611 level to halt its present weakness. This will clear the way for further strength towards the 1.3866 level, its Nov 04’2011 high and subsequently the 1.4241 level, its Oct 27’2011 high. All in all, with its short term downtrend remaining intact, EUR looks to weaken further possibly towards the 1.3144 level.
