EURUSD: With EUR building on its Friday rally and testing the 1.3937 level, its Sept 15’2011 low, its short term trend resumption is now looming. However, it needs a convincing breach of the 1.3937 level to trigger that trend and open the door for further strength towards its Sept 08’2011high at 1.4095. Above here will create scope for further recovery higher towards the 1.4283 level, its Sept 06’2011 high and then its falling medium term trendline presently located at 1.4356. Its daily and weekly RSI are bullish and pointing higher suggesting further strength. Alternatively, the risk to our upside view will be a return to its Sept 28’2011 high at 1.3690 and next its Oct 18’2011 low at 1.3650. We may see a reversal of roles as support occurring at this level and turning EUR higher but if that zone is taken out, risk of further weakness will build up towards the 1.3377 level, its Oct 10’2011 low and later the 1.3144 level All in all, EUR continues to maintain its short term recovery tone started from the 1.3144 level.
