The EURUSD continued its bearish momentum last Friday , topped at the 1.2392 levels and bottomed at the 1.2270 levels . This development leaves the pair targeting the 1.2180 levels , a halt is likely , but a cut will open 1.2070 next , further losses will open 1.1940/1.1875 levels.
On the upside , resistance comes at the 1.2376 levels , break of the 1.2376 levels on a daily closing basis will turn outlook neutral for retesting the 1.2530/1.2600 levels before the next fall.To reverse risks to the upside , 1.2630 should be taken out on a daily closing basis otherwise , risk will remain to the downside even in case of recovery !
In all ,as long as resistance 1.2376 holds on a daily closing basis , outlook in EURUSD remains on the downside towards the 1.2180 levels ahead of the 1.2070 levels.above 1.2376 will turn outlook neutral and bring consolidation below 1.2600 levels before the next fall .
In the medium term forecast , as long as 1.2375 holds on a weekly closing basis the pair is very bearish and a lower leg below 1.2042 towards 1.1875 is strongly suggested , a weekly closing above the 1.2375 levels will turn outlook neutral for retesting main resistance at the 1.2613 levels , but overall outlook will remain to the downside as long as 1.2613 holds on a weekly closing basis .
In the long term forecast , as long as 1.3129 holds on a monthly closing basis , fall from 1.3994 levels is likely to resume towards the 1.1739 levels (high of Sept 2005 ) .Note that this level has been serving as strong support since late of 2005 , If this level fails on a monthly closing basis – I think It will – a free fall towards the 0.9994 levels (high of June 2002) will be in sight !!!
Key data/events which may influence EURUSD this week:
German industrial production. Monday , Dec 08
German trade balance.Tuesday ,Dec 09
French industrial production.Wednesday , Dec 10
US retail sales & US jobless claims . Thursday ,Dec 11
Euro zone industrial production , US producer prices index & US consumer sentiment. Friday , Dec 12