The main level that we have had on our screens for some time is the 1.16 level in EUR/USD. We can see on the Monthly chart that since breaking the lows on a monthly closing basis below the 2010 and 2012 lows of 1.1875 and 1.2040 respectively, the Euro has been in a clear Long-term Downtrend and the most recent bounce failed at 1.16 the prior Lower Highs on the weekly and monthly level. From here only a weekly closing above 1.16 would suggest a further rally into the monthly lows from 2010/2012 into that 1.18/1.20 area.
The highest we would expect EURUSD to rally would be 1.22 area as we have the 200 period moving average on the monthly level above the market, as well as the downward sloping 30 month moving average comes into play in this same region. So in our model that should put a lower high on the monthly level at or near that average.
From here we like remaining core short the Euro with Risk above 1.16 for now, if again we get a weekly closing above 1.16 then it is warranted to take some short risk off for a move into the 1.20 area, however until such time we like staying short up here.