Having rallied strongly and tested the 1.2954 level which is slightly below the 1.3000 level highlighted in our Thursday analysis, risk of a retest of that level still remains as evidenced by its present bid tone. However, caution should be exercised as EUR could face a strong resistance before or at that level is likely to turn it back down. Conversely, if that level breaks ways will be paved for further strength towards its May 10'10 high at 1.5093. On the downside, a violation of the 1.2721 and the 1.2466 levels will have to occur to halt its current upside momentum and clear the way for more downside pressure towards its .50. Fib Ret (1.1875-1.2466 rally) at 1.2169 and the 1.2162 levels, its Jun 14'10 low. Below there will set the stage for a move lower towards the 1.2000 level and then the 1.1875 level, its 2010 low. A cap is expected at that level to turn the pair back up again if tested. All in all, having resumed its nearer term uptrend initiated from the 1.1875 level, further upside risk is likely.
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