FXstreet.com (Barcelona) - Euro retreat from 1.5100 area on Early December extended on Tuesday to a 5-month low with daily charts showing a bearish cross which could advance a decline to levels around 1.3800 on the mid term, according to Ashraf Laidi, technical analyst at CMC Markets.

EUR/USD 50 day moving average has crossed below its 100-day MA, a move which, according to Laidi, has very negative precedents: The last two occasions when the EURUSD's 50-day MA fell below its 100-week MA with the 200-day MA remaining below both trend lines was in Jul 2008 and March 2005; which preceded a 21% and 11% decline in EURUSD respectively.

Applying dynamics seen in previous occasions, Laidi estimates that Euro could drop to levels around 1.38 by mid Q1: Those dynamics were no different from the current Eurozone uncertainty involving Greece as well as the rest of Southern Eurozone members. This supports our $1.38 view for EURUSD by mid Q1 first communicated on Jan 5th.