With EUR selling off and breaking below its key support at the 1.2945 level, its Dec 14'2011 low on Wednesday, further bearish momentum is expected to target the 1.2874 level, its Jan 2011 low. We may see a breather at this level but if it gives in, further declines should shape towards the 1.2703 level and then the 1.2587 level, its Aug'2010 low. Its daily and weekly RSI are bearish and pointing lower suggesting further weakness. Alternatively, on any recovery higher, the pair will aim at the 1.2945 level but it will have to break and hold above the 1.3197 level followed by the 1.3212 level, its Nov 25'2011 low to reduce its broader medium term downside pressure now in place. This 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, having resumed its medium term downtrend, broader downside risk now targets the 1.2874 level and the 1.2703 level.

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