FXstreet.com (Barcelona) - The EUR/USD has been trading in a downward trending configuration since Jan 28 high at 1.3320, reaching a low of 1.2513 on Feb 18, despite last week's 400 pips rally, the Euro was capped some pips short of 1.300 and fell on Monday t0 1.2660.

Nicole Elliott, senior technical analyst at Mizuho Corporate Bank, observes last week's performance as a signal of a trend turnover: Last week's 'hammer' gives us hope that the five consecutive weeks' worth of cautious downside probing of the downward-sloping 'wedge' formation might have ended. A sustained break above the top of this, around 1.3100, would add some much-needed weight to our argument.

The Euro could pick up and regain some positions, according to Elliott, although volatility is expected to remain high: The Euro may catch up a little with what Cable has already done and would help lift Yen crosses too. One-month at-the-money implied volatility remains relatively high at 18.50% and will probably trade around 20.00% for another month.