The pair's continued price hesitation suggests further downside risk. However, EUR will have to break and hold above the 1.3547/1.3611 zone to prevent a return to the 1.3212 level, its Nov 25'2011 low.This if seen will set the stage for further strength towards its daily 200 ema currently standing at 1.3863. Further out, the 1.4241 level, its Oct 27'2011 high and the 1.4342 level, its daily falling trendline come in as the next upside targets. Alternatively, on continued trade below the 1.3547/1.3611 zone, the pair could see a return to the 1.3212 level, its Nov 25'2011 low where a violation will clear the way for further declines towards the 1.3144 level, its Oct'2011 low. EUR has been under pressure since tumbling off the 1.4241 level in late Oct'2011. Below the 1.3144 level will open the door for more weakness towards its psycho level at 1.3000 and possibly lower towards the 1.2874 level. All in all, with EUR bearish and vulnerable to the downside in the medium term, risk remains lower despite recovery attempts.

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