Euro Outlook

The euro looks set for decline which I am regarding as a correction or a retracement as the point, more evaluation will be carried out as we go along especially around the shaded areas on chart. I would say even if we see an upside move from here, a top should be capped just below or around the 1.3488 resistance zone(just below the 1.3500 level).

By the 31st December 2012, during the London session, it would become clear on what direction price will go first, on the downside 1.3108 will be first target, we might see 1.3836 as second target, and theis downside should bottom around the lows of 1.34xx, when shorts should be covered albeit a downward extension could seen maybe down to 1.32xx, but at that point caution should be taken but nevertheless the movement of price will give more insight before hand.

Consequently, for this bearish scenario to come into actual play a decisive break below 1.3078 should be seen, that is after achieving the first target as above.

Kindly feel free to post your comments, more to follow when the market opens most like during the London session and time allowing will be posting some intermediate trades as well.

* Double-click on chart to larger view

Happy trading!