EUR/USD - Further Downside Anticipated
EUR/USD appears to have entered a short-term consolidation phase which is favoured to yield a lower high versus the recent 1.2443 double top.
Failure to remain below 1.2443 will suggest a stronger recovery higher. We now look for a break back over 83.508 (02/08/2012 high) in the USD index which will then warn of a fresh leg higher to break over the annual high at 84.100.
Longer-term a return to the 1.1000 region in EUR/USD, close to multi-week channel support, remains feasible.