TD Securities - "Price action in EUR/USD remains soft, without (yet) becoming outright bearish. EUR/USD has eased through trend channel support after failing around the 1.35 area mid-week. However, the 40-day MA at 1.3332 has managed to contain weakness more or less though late trading Friday. We think the 1.3259 point is the key pivot for the market now. We can allow for a modest infraction of the 40-day MA from a short-term perspective but sustained losses and particularly weakness below the December/January high/low zone would point to further EUR losses and likely trigger a broader reassessment of EUR prospects. It’s not all bad news for the EUR. There is still a chance that the market is consolidating recent gains, rather than thinking about going into reverse. A potential bull flag formation characterizes the recent drift off the highs. Above 1.3470 early next week would be a EUR positive.
The soft undertone in EUR/USD price action persists on the weekly chart but, echoing the daily picture, the story is not yet outright negative. Weakness could, however, easily extend to weekly channel support at 1.3162 and might or even 1.2945 to retest the big, bullish H&S reversal break out. Key weekly resistance remains 1.3650/60."