Forex Flash: EUR/USD targets a drop to the upper 1.24 - TDS (Barcelona) - Last week's break through support in the low 1.28 area (200-day MA and the September/October range base), according to Shaun Osborne, Chief FX Strategist at TD Securities, "argues more strongly for lower EUR levels."

"The break out from the sideways range trade (a double top) targets a drop to the upper 1.24 area. A second weekly close below the 40-day MA supports the negative outlook now. Early week gains next week should be contained to the 1.2780 area. Only a move back above 1.2806 takes the EUR to firmer technical ground" Mr. Osborne notes.

From a broader perspective, Shaun adds. "Failure to sustain medium-term gains through 1.30/1.31 looks the most costly development for the EUR bull case on the weekly charts. The 1.3096 trend line remains a potential bull trigger (neckline of a potential weekly inverse Head & Shoulders) but we are a long way from there at the moment. Weekly support in the low 1.26 area would give the H&S formation a bit of symmetry and bolster its credentials but we are not holding our breath."