By Mohammed Isah, technical strategist and head of research at FXTechstrategy.com

EUR/USD: Even with its current downside vulnerability, EUR continues to retain its consolidation to corrective tone started from the 1.3433 level.

Having said that, a break and close above the 1.3735 level must occur to trigger the resumption of that recovery. In such a case, additional strength will develop toward the 1.3787 level (Feb. 17, 2010 high) with a loss of there pushing the pair further toward its Feb. 1, 2010 high/Feb. 9, 2010 low at 1.3838/51. We look ahead to the latter zone to cap corrective recovery gains, if seen, and turn EUR back lower again in sequence with its broader medium-term downtrend.

On the other hand, if a build up on its current weakness is seen, threats of a recapture of its 2010 low at 1.3433 cannot be ruled out where a break will activate more weakness toward the 1.3422/09 levels. Beneath the latter will set the stage for more downside pressure, targeting its June 3, 2009 low at 1.3211 and next its big psycho level at 1.3000. Overall, although the pair retains its broader medium-term bearishness, risk of a corrective recovery to consolidation continues to be seen.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces The Professional Suite for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.