Richard Perry
Independent Analyst
It almost goes without saying, but the outlook for the euro remains incredibly weak. It is now within striking distance of the $1.3375 implied target from the double top pattern completed in May and there appears to be very little that will stop it from hitting this first target. Rallies continue to be sold into and downside momentum is growing. Despite the RSI now being at its lowest level since June 2012, the force of the stepped decline is decidedly with the bears now. There may be the occasional minor rally within the decline that lasts for maybe 40 to 50 pips, but the sellers just use this as another opportunity to hit the euro once more. The latest resistance comes in at $1.3440 and then above there $1.3475. Below the $1.3375 target the next key low is the November 2013 support at $1.3295. The prospect of a technical rally is clearly growing with the RSI at such a stretched level and it may need a catalyst. Non-farm Payrolls are on Friday, whilst the ECB monetary policy is not until next Thursday. It could be a while yet.
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