The EUR/USD has rebounded off the 14-day MA to solidify daily RSI trendline support (9 & 14-periods). While these remain in-tact, there is scope for a daily close above the key Fibonacci retracement at 1.2986 (61.8% of the April 12/June 7th decline) towards 1.3109 (38.2% retracement of the entire December 3rd/June 7th decline). Moreover, the interest rate differential between the EU and US has accelerated (in favor of the former) and the Euro remains net short by speculators, which should provide ample room for the single currency to appreciate. In the event that RSI trendline support is broken, focus would then shift to the rising 10-week MA (now in the 1.25 region).
