While a clear corrective recovery higher is not seen, EUR faces downside risk. This view remains intact while it holds below 1.2407 level. The big risk is for the pair to return to the 1.2162 level. Below here will resume its broader weakness towards the 1.2149 level, its Jun 27'2010 low. EUR may turn higher on testing this level but if that level breaks, further declines could shape up towards the 1.2100 level. Below here will turn risk towards the 1.2000 level. Its daily RSI is bearish and pointing lower supporting view. On the upside, the pair must break back above the 1.2286/1.2407 levels to annul its current weakness. This if seen will pave the way for a move further higher towards the 1.2748 level followed by the 1.2824 level. Further out, a cut through here will target the 1.2902 level. All in all, EUR remains biased to the downside medium term.

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