Those of you out there looking for a bottom and reversal may have to wait still: the EUR/USD seems to be bottomless at this point, posting lower lows and lower highs daily basis, and holding near fresh yearly lows set for now at 1.2166. European future seems gloom, the crisis is its zenith, and trust is a scarce resource these days. Looking at daily chart, latest bearish rally from 1.2745 to current levels seems slightly exhausted at the time being, and corrections can’t be ruled out; however, selling on recoveries is still favored over buying for profit. Levels to watch from current price are 1.2288, past yearly low, and 1.2350 area that could be reached on short covering. To the downside, the pair has some support around 1.2140, followed by the 1.2060 area. Once below this last, the road is clear for a retest of 1.1875 June 2010 monthly low.
In the short term, market sentiment remains strongly bearish for the EUR/USD, as the common currency is unable to overcome now the 1.2200 level. A short spike above was unable to hold, although stocks moving off recent lows suggest a consolidate stage before new lows are seen. Short term, 1.2210 comes as immediate resistance ahead of 1.2250 area, 20 SMA in the 4 hours chart: approaches to that level will likely be seen as selling opportunities by late sellers. Renewed pressure below 1.2140 should point for a continuation towards 1.2100 over the upcoming Asian session.View Live Chart for EUR/USD