The Euro has mounted an impressive rally against the US Dollar in recent weeks as surging risk appetite has weighed on the safety-linked greenback, but technical positioning may be setting up for a downward reversal. Prices are showing signs of stalling momentum ahead of 1.4181, the 50% Fibonacci retracement of the07/18/08 - 10/31/08 decline from the record high above 1.60. This level marked the swing top for EURUSD in January and preceded a drop of nearly 2300 pips. A similar reversal this time around would meet initial support at the 38.2% Fib level near 1.3750.
[I]Created using FX Trek IntelliChart - Prepared by Ilya Spivak[/I]