Euro had an erratic day extending the rally to 1.2835, dropping sharply to 1.2750 then recovering all losses to be trading at 1.2835 again.It is poised to test 1.2850 and complete the corrective swing from 1.2725.Once Euro fails to hold above 1.2835 it will trigger the next drop to test the 1.2600/40 area initially and 1.2455 later.The one certainty for the next couple of days is provided by the speed of yesterday’s rise – it may be too brief to be the full extent of the secondary rise.If that is the case, then Euro will be supported around 1.2780 on its drop and then make another rise to test the 1.2850/70 region.But unless Euro rises firmly through 1.2890 it should give way to the downside.
Sterling’s failure to hold above 1.9000 would normally be a sign of weakness, but the quick recovery suggests another push towards 1.9050 to complete the corrective sequence from 1.8775.
Dollar/Swiss had an erratic day and finally fell a little lower to 1.2275.It should extend this drop to 1.2250 today.If 1.2340 contains the rise, another drop towards 1.2185 will be seen.
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