At around 1.306-1.310, EUR/USD is currently testing support near its 50 percent Fibonacci retracement from early July lows on the daily chart which is intersecting the lower band of the Bollinger band (P=20, SD=2).

RSI on both daily and 4-hour charts have fallen below the 30-mark, which suggests the pair is clearly in the oversold territory and any fundamental signal showing weakness for the greenback could push the pair up to 1.320-1.327 (R1) before marching to 1.336 (R2), its 38.2 percent Fibonacci. Further up, 1.344 (R3) is seen as a strong resistance for the pair.

However, with market concerns still centered around the likelihood of more negative news from the EMU region, any signal of that sort could push the pair down to around 1.303-1.288 (S1) before a stop around 1.279 (S2), which is its 61.8 percent retracement.

On Tuesday, unemployment, CPI (both for November) and Trichet's speech will impact from the euro side while Chicago PMI and consumer confidence (both for November) will mainly supply signals from the other side.

 

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