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Euro/Dollar –  Risk of further weakness continues to build up following a second week of losses the past week. Its continued weakness is coming on the heels of a loss of upside momentum at the 1.4938 level in early May’2011.

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On further weakness, EUR will target the 1.4061 level, its April 01’2011 low at first with a decisive penetration of that level calling for more weakness towards the 1.4020 level, its mar 28’2011 low. Below the level will expose the 1.3852 level, its Mar 15’2011 low. Its weekly RSI is bearish and pointing suggesting further weakness.

On the other hand, for the pair to reverse its present weakness, it will have to return into its broken channel and then above the 1.4938 level. This will trigger the resumption of its long term uptrend towards the 1.5140 level, its 2009 high.

All in all, having lost upside momentum and continues to sell off, further weakness is expected in the new week.