EURUSD: Downside risk is now seen following EUR’s Tuesday weakness. However, we think further weakness should be capped at the 1.2900/1.2899 levels. This if it occurs will turn attention to the upside possibly towards the 1.3127 level. On the other hand, it will have to return to the 1.3198 level to create scope for more upside towards the 1.3250 and then the 1.3318 level. The alternative scenario will be a continued downside pressure towards the 1.2900 level where a violation will aim at the 1.2750/35 levels, its key support levels. A cut through here will aim at the 1.2700 level followed by the 1.2735 level. All in all, EUR continues to retain its corrective upside bias.
