EURUSD (1.1737): The euro extended declines yesterday, mostly on account of the uncertainty surrounding the German political developments. Price action shows that EURUSD is likely to extend the declines down to 1.1704 level of support seen on the daily chart. This marks the retest of the breakout from the falling wedge pattern from where price previously broke out from. However, further declines can be expected only on a strong close below this support level. With the trend line offering dynamic support and the horizontal support level confluence, the declines could be limited. EURUSD is most likely to maintain a sideways range as a result. On the 4-hour chart, the hidden bullish divergence that is developing adds weight to the limited downside in price.
