FXstreet.com (Barcelona) - Euro Dollar has been moving in range between 1.44 and 1.51 during the Q4 to drop lower in the last two weeks of December, and during next quarter, the pair should base against 1.4250 area, foresees Nicole Elliott, technical analyst at Mizuho Corporate Bank, who warns about the possibility of a large spike lower.

For the month of January, Elliott expects the Euro to base against 1.4250 area: the Euro dropped to 1.4200 on almost record futures volume during the middle two weeks of December. This suggests stale longs bailing out and so it should now base against the 200-day moving average at 1.4250.

However, Elliot warns about the risk of a large spike low: While contained so far, until the end of this month the risk of a very large 'spike low' remains because of the rapidly narrowing Ichimoku 'cloud'.

During February and March, the pair could pick up and return to levels seen on early December, according to Elliott: During February and March the Euro should rally smartly, pushed up by the rising and very large weekly Ichimoku 'cloud', to re-test the psychological area at 1.5000 and last year's high at 1.5145.