It’s very difficult to be bullish either of these currencies but on a very long term view, EUR/USD can still be considered to be overvalued, with levels near 1.20/1.25 closer to ‘fair value’. The medium term downtrend is still in force and only some strong weekly closes above 1.3600 will change that. A short term base is also definitely in place at 1.2625 and again it will take a number of daily closes below 1.2600 to alter that fact.

As we all know, FX is one big range trade. There are plenty of reasons to be short both currencies, so throw the fundamentals out the window and trade the 1.2600/1.3550 range.

From a short-term perspective, the bulls are in control. First support will be at 1.3050/55 and the 55-day MA at 1.3130 is watched by many of the pro-traders, so expect selling ahead of there and more stops above.