The EUR/USD & US Dollar Index failed once again at the 14-day MA on Thursday, setting up the latest retest of the critical 1.2132/1.2155 & 87.45 region. The 1.2132 level marks the 50% retracement level of the 2000 to 2008 bull campaign and the 1.2155 level is a monthly trendline that originates off the all-time lows. In both cases, these key levels for the EUR/USD & DXY have been tested three times and generally the fourth attempt carries a high probability of breaking through these critical barriers. In the event of a clean break, the EUR/USD's first downside target lies near the 1.18 handle. If, however, these key levels hold (or are only marginally broken), then focus shifts back to the key 14-day MA.
