FXstreet.com (Barcelona) - The Euro is appreciating on early European session extending rebound from 1.4045 low on Monday to levels above 1.4100, however, Karen Jones, technical analyst at Commerzbank observes a switch to the downside in the medium term. Jones affirms that medium term risks for the Euro have turned to the downside: "We believe that technically short to medium term risks for EUR/USD are skewing to the downside. We have taken a closer look at the weekly chart and the evidence is mounting – a close below the 6 month uptrend at 1.3912 will confirm." Jones points out to developments in the weekly chart to support her theory: "the first of which is that the market appears to have stalled at the top of a one year converging range – this is located currently at 1.4282 and the market has yet to register a weekly close above here." The second reason, according to Jones is the bearish divergence on weekly RSI: "The second observation to make is that the recent high of 1.4450 was accompanied by a bearish divergence of the weekly RSI and the third observation is that the weekly RSI is starting to break lower." All in all, Jones states that the 6-month uptrend is exposed: "short to medium term risks are skewing to the downside and that the 6 month uptrend at 1.3912 is in fact exposed. A close below here will confirm that the market has topped."

Source