Trading strategy: small short at 1.2275, stop at 1.2325 (0.5% risk), objective at 1.2175

Euro's recovery was capped at 1.2450 as Fitch downgraded Spain's credit rating from AAA to AA+, intensifying the intra-day sell-off below 1.2300 and also below the falling trend line coming from 1.3360, connecting last 4 weeks' tops. Since the break above the said trend line was not sustained, the recovery process in on-hold for now, but so is the euro's decline. On a short-term basis, it is still far from where one should look for a stable bottom and positive momentum to help climbing towards last month's trading range above 1.3. In case of further recovery past Friday's top - look for resistance to emerge at 1.2500 then a bit higher, at 1.2600/20. Current exchange rate is 1.2311 @08:12 GMT

Support:1.2280, 1.2200, 1.2130/45 and 1.2000 Resistance: 1.2350, 1.2430/50, 1.2470/00, 1.2550 and 1.2620 Market sentiment: long term - bearish, medium term - bearish, short term - bearish, intra-day - slightly bullish

EURUSD 4hrs chart 5-31-2010

Have a good day!