While our bias remains higher on corrective recovery, we will like to see the cross break and hold above the 1.2930 level, its Nov 30'10 low to convince the market of further strength. EURCHF tested and held at that level on Friday suggesting that on continued failure, corrective pullbacks could ensue. However, as long as the cross holds above its Jan 06'2011 high at 1.2724, we see the possibility of the 1.2930 level giving in and triggering further recovery strength. This will set the stage for a move higher towards the 1.3203 level, marking its Dec 12'10 high and subsequently the 1.3388 level, its Nov 25'10 high. Its weekly RSI is bullish and pointing higher suggesting further strength. On the downside, for the cross to reverse its current upside offensive, a break back below the 1.2402 level printed on Dec 30'2010 is required. In such a case, further weakness will drive EURCHF lower towards the 1.2300 level ahead of the 1.2200 and then 1.2100 level, all representing its psycho levels. Overall, EURCHF continues to maintain is broader long-term downside vulnerability but remains biased to the upside in the immediate term on correction

EURCHF