Price action on EUR/USD (a 4-hour chart of which is shown) as of Friday (12/03/2010) has made a bullish correction on the heels of the Non-Farm Payrolls report that has brought price up to around the 50% Fibonacci retracement level of the most recent bearish run of late November. This occurs within the context of a parallel downtrend channel extending from the early November high around 1.4280, that continues to be valid for the time being. The current 50% retracement has brought price up to the very top of the parallel downtrend channel, and has also approached key resistance in the 1.3400 price region.

The bearish trend that is currently contained within the parallel downtrend channel is well-formed, and if the 1.3400 resistance is able to hold, there is continued potential for further EUR/USD weakening within the context of the bearish trend.

With the noted upside resistance around 1.3400, a breakdown below the intra-trend correction support line and then key 1.3150 support should target a re-test of the lows just below 1.3000 once again.

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