EURUSD: Corrects Higher, Further Recovery Risk Likely.
EURUSD: With EUR taking back its earlier losses for the week to close higher on Friday, risk of further upside is now building up. In such a case, further upside is likely to occur in the new week with eyes on the 1.2407 level which also serves as its .50 Fib Ret (1.2748-1.2040 decline). We expect a combination of these levels to turn the pair back lower. However, if this fails, further corrective recovery risk could develop towards the 1.2482 level, its .618 Fib Ret. Its weekly RSI is bullish and pointing higher supporting this view. On the downside, the risk to its present upside offensive will be a return to the 1.2040 level. Below here should target the 1.2000 level, its big psycho level. We expect EUR to face price hesitation ahead of or at this level. In such a case, it could see it back off higher but if that level is breached, the pair should weaken further towards the 1.1950 level. All in all, EUR now faces corrective recovery risks.