TD Securities - "The divergence between the downward-tracking oscillator study and the upward movement in spot price we highlighted last week was indeed a prescient warning of a downward shift in EUR/USD. The EUR is finding support around 1.32 as markets head for the week’s close and that may prompt a modest, short-term bounce in the early part of next week. We do not think the downside move is complete though. A clear push through 1.3195/1.32—more or less pivotal in the past few months—should target a drop back to the 1.30 area at least—and possibly lower. We are bearish and we think short-term gains back towards the 1.3275/1.3325 area are a sell now. EUR/USD has topped out around the top of the recent trading range and should move back towards the range base (1.2700/50) in the next few weeks now.
A false break on the downside below weekly support (and rebound) in early July looks to have been followed by a false break on the topside of weekly resistance through late August. A further sell-off is likely to follow, according to weekly price patterns. Heavy selling this week (after a marginally higher open Monday) leaves a big, bearish “engulfing” line on the weekly chart, signally a strong rejection of the trend breaks and the 100-week MA. A medium term top is in."