Commentary: The inability to hold above the 6/1 low at 1.3392 and the break under the trendline drawn off of the October 2006 and January 2007 lows indicates additional bearish potential.
The next support level is the 100% extension of 1.3680-1.3392/1.3552 at 1.3264. Former support at 1.3392 should be solid resistance now. The pair has stalled at the 100 day SMA, a break under here would be significant as the EURUSD has traded north of this moving average for all of 2007. Even if the pair does continue lower in the next few days, we prefer to wait for the larger 3 wave setback before aligning with the downtrend.
Strategy: Waiting for a 3 wave setback in order to align with the downtrend.