The euro (CME:E6U14) is approaching a resistance area at $1.37, but at a break below $1.35 the currency will extend losses driving prices towards lower levels returning back to a possible $1.34 and $1.33-1.325. However, this wont rule out a bearish continuation course towards more depressed values.
If price can run back up, we think that the current maximum resistance lies betweent the $1.37 or $1.38 area. The previous highs of $1.40 are considered the most significant obstacle in the short- and medium-term, coinciding with the monthly bearish reversal key--and where the downtrend should be finally resumed.
A direct break above $1.40 will bring the bearish move to an end, signalling a rally to higher levels.
Let's take a look...