EUR/USD: More medium-term sideways trading the most likely outcome

I certainly think there is significant potential for more downside in the EUR but this will happen mainly on the crosses I think. EUR/CAD, EUR/AUD, EUR/JPY etc are all showing reasonable prospects of another 5% fall as we head towards the next ECB meeting. EUR/USD has already fallen from 1.40 to 1.37 and is likely to encounter strong support near 1.3625/50. With the medium-term range-trading mode firmly entrenched, I would expect that EUR/USD will struggle to generate fresh downside momentum.

I prefer to look to the crosses for trades. If EUR/USD struggles to break below 1.3650, then I will be tempted to sell more USD/CAD, or re-buy cable, or maybe even to sell USD/JPY.