EURUSD: With its bullish nearer term momentum remaining intact, EUR was seen testing its strong resistance residing at the 1.2671 level, its May 21'10 high in early trading today. While the pair holds firmly above the 1.2466 level, its Jun 21'10 high, we look for the 1.2671 level to eventually break and trigger further recovery strength. The pair triggered its current bullish nearer term uptrend from the 1.1875 level after declining for seven months off the 1.5143. A clean break and hold above the 1.2671 level will pave the way for further up move towards the 1.3000 level, its psycho level and even higher.
A cap may be seen at that level (1.3000) thus turning the pair back down again. On the downside, a violation of the 1.2466 level followed with a break of its .50. Fib Ret (1.1875-1.2466 rally) at 1.2169 and the 1.2162 levels, its Jun 14'10 low will have to occur to reverse its present strength and target the 1.2000 level ahead of the 1.1875 level, its 2010 low. A close below that level will annul its entire corrective recovery bias and bring further weakness towards it's the 1.1801 level where a breach will target its major support at 1.1640 established in 2005.