Our outlook on EUR remains lower for a likely return to the 1.3003/the 1.2975 levels. This view remains valid as long as the pair continues to hold and trade below the 1.3387 level and its long term falling trendline. This suggests that a decisive break and hold below the mentioned support could see the pair weakening further towards the 1.2879 level, its Jan 23'2011 low. On the other hand, to annul its downside pressure, the pair will have to break and hold above the 1.3387 level. This will leave it targeting the 1.3484 level with a cut through here pushing the pair further higher towards its Dec 02'2011 high at 1.3547. Further out, price extension if seen will aim at its weekly 200 ema at 1.3642. All in all, EUR remains biased to the downside short term.

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