EUR-USD Sets Up for Further Weakness

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (FXTechstrategy.com) -- EUR-USD: With further downside momentum continuing to be seen, EUR now looks to weaken further toward the 1.4020/00 levels, its March 28,2011 low/psycho level. This zone is expected to hold as support on an initial test and turn the pair back up. However, if it breaks, further declines are likely toward the 1.3852 level or even lower toward the 1.3754 level, its March 11, 2011 low.

Alternatively, the pair will have to invalidate the 1.4339 level and the 1.4422 level to halt its present bear threats and then create scope for further strength toward its May 6, 2011 high at 1.4586 and ultimately the 1.4938 level, its 2011 high. In the absence of the above, our bias remains to the downside nearer term. All in all, the pair continues to retain its nearer term downtrend tone.

>To order reprints of this article, click here: Reprints