The Euro continues to trade within a progressively narrower wedge formation against the US Dollar, and the next several days of price action will likely dictate Euro/US Dollar direction for the next several weeks of EUR/USD trading. Already we see the EUR/USD attempting yet another break to the topside after holding support overnight, and such a breakout would likely target previously stiff resistance at the 61.8 percent Fibonacci retracement of 1.3120-1.2390 move at 1.2840. Otherwise, subsequent support comes in at a triple-bottom in the 1.2330-1.2422 range.
Our bearish bias accurately called for a retest of wedge formation lows, but continued failure to break lower suggests that the Euro may in fact post short-term gains against its US counterpart.