HIGHLIGHTS:

EURUSD: Despite its price failure at the 1.3703 level on Monday, EUR continues to retain its consolidation to corrective tone initiated from the 1.3433 level..


EURUSD

EURUSD

EURUSD: Continues To Retain Consolidation Tone.

EURUSD - Despite its price failure at the 1.3703 level on Monday, EUR continues to retain its consolidation to corrective tone initiated from the 1.3433 level. With that said, a break and close above the 1.3735 level must occur to trigger the resumption of its recovery from the 1.3433 level. In such a case, further strength will develop towards the 1.3787 level (Feb 17’10 high) with a loss of there propelling the pair further towards its Feb 01’10 high/Feb 09’10 low at 1.3838/51. We expect the latter zone to cap corrective recovery gains if seen and turn EUR back lower again in sequence with its broader medium term downtrend.
Alternatively, if a build up on its marginal gains on Monday is seen, threats of a recapture of its 2010 low at 1.3433 cannot be ruled out where a break will activate further weakness towards the 1.3422/09 levels. Below the latter will set the stage for more downside pressure towards its Jun 03’09 low at 1.3211 and next its big psycho level at 1.3000.