TD Securities - "EUR/USD managed to move a little higher this week, after establishing a foothold above 1.32 Monday. This was in line with our expectations. More generally, however, there is still little sign of a strong trend developing here one way or the other; we are still essentially within a broad, 1.27/1.34 range. Short-term price signals suggest that the EUR is struggling a little around the 40-day MA and may see a softer bias through the early part of next week if minor support at 1.3255/65 fails to hold. We still rather think that, following the top-out in the market above 1.34 in August, a retest of the low end of the recent range is more likely than a renewed push to set new short-term cycle highs. Although technical signals are not especially strong, we continue to favour short positions against stops above 1.34.
The bearish weekly reversal signal from two weeks ago remains intact. That signal and the broader, rangey feel of the market are really what informs our view of EUR/USD. Trend momentum signals are weak and weakening (daily and weekly studies), suggesting that the trading environment is liable to remain rather choppy. But, having peaked and reversed above 1.34 last month, we still rather think downside risks are more significant."