EUR/USD: Susceptible To Corrective Recovery

 @ibtimes
on February 21 2010 1:37 PM

EURUSD: Although EUR retains its overall medium term downtrend triggered off its 2009 high at 1.5143, there are signs that the pair may take yet another stab on the upside. This is based on EUR's inability to sustain its break below its Feb 12'10 low at 1.3530 level on Friday following a reversal of its Thursday losses to close the week marginally lower at 1.3609. Unless its 2010 low located at the 1.3442 level is retested and eventually broken, we may see the pair head higher in a corrective mode towards the 1.3787 level, its Feb 17'10 high where a break will put EUR on the path to further upside gains towards the 1.3838/51 level (Feb 01'10 high/Feb 09'10 low). We expect that zone to reverse roles and provide resistance thus turning the pair lower. Alternative, a break back below the 1.3442 level will put our corrective downside view on hold and trigger further downside weakness towards its Jun 03'09 low at 1.3211 into focus with a turn below there targeting its big psycho level at 1.5000.

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