With EUR weakening in Nov and Dec'2011, it enters the New Year (2012) bearish and pointing lower suggesting we could see further declines in the new week.In such a case, its major support located at the 1.2874 level, its Jan'2011 low will be targeted where we may see a breather. However, if this fails to occur, the pair will weaken further with eyes on the 1.2587 level, its Aug 2010 low with a violation of there paving the way for more downside pressure towards the 1.2400 level, its psycho level. Its weekly RSI is bearish and pointing lower suggesting further weakness. Alternatively, the pair will have to break and hold above the 1.3144 level followed by the 1.3212 level, its Nov 25'2011 low to reduce its broader medium term downside pressure now in place. A reversal of roles as resistance could occur at these levels but if that fails, it will bring further gains towards the 1.3419 level, its Nov 17'2011 low and then its 1.3547 level, its Dec 02'2011 high. Further out, the 1.4241 level, its Oct 27'2011 high. All in all, the pair continues to hold on to its medium term downside bias as we enter 2012 with risk of further weakness threatening.

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