EUR/USD made yet another fresh low within its recent medium-term downtrend at 1.2358 last week, almost reaching the 1.2330 low of Oct 28th, 2008.

The rate generally traded just above its lower Bollinger Band, and the consistent downward move again pushed the rate’s 14-day RSI into oversold territory at 27. Thus far, EUR/USD has shown little corrective activity since the 1.3093 reaction high of May 10th.

Support for EUR/USD shows at 1.2358, 1.2334, 1.2209, and the psychological 1.2000 level.
Resistance to the topside is seen at 1.2521, 1.2739 and 1.3093.

Overall, the medium-term outlook for EUR/USD remains distinctly bearish while the rate trades
below its 200-day Moving Average which is increasing its downwards slope and now comes in at
1.4153. Selling rallies is therefore preferred from this perspective.

On a short-term basis being short EUR/USD is certainly preferred in this apparent Fifth-wave
decline. Nevertheless, given the current oversold condition, traders should be cautious about
potential upside corrective activity back to within the 1.2591-1.3093 range of what looks to be
the fourth wave of one lesser degree.