Image © Adobe Images

The euro to dollar exchange rate (EUR/USD) looks set to test 1.14 in the coming days.

The euro looks prone to further weakness against the dollar in the short-term timeframe, and any rebounds will likely be met with renewed selling interest.

As the chart shows, gains are capped by a downward sloping trendline and we won't rule out any small relief rally that brings the market back towards that trendline, in keeping with the pattern of play since mid-September:

Note that the RSI in the lower panel is a subdued 35 which is consistent with a well entrenched downside momentum. Last week saw the exchange rate break below the 100-day exponential moving average (EMA), signalling increasingly entrenched downside momentum.

The downside target we are watching is 1.14, which

See Full Page