The EUR/USD is finally finding that stabilization we were anticipating with the EUR/GBP leaping on oversold conditions. Despite all of the uncertainty swirling in the FX community concerning the ECB's future monetary policy, the EU's CPI data met analyst predictions while Industrial Production declined slightly less than expected.

Therefore, investors finally have some positive news to feed off of in a fairly quiet week news-wise for the EU. The EUR/USD is righting itself just above April lows, preventing a heightened selloff for the time being.

However, there is little evidence to support the argument for a lasting recovery in the currency pair. The EUR/USD is still trading below our 1st tier uptrend line with inflection points on the way.

Speaking of inflection points, the pending collision of our 1st and 2nd tier uptrend and downtrend lines should yield significant volatility. Therefore, we could experience a breakup of the consolidation taking place.

Despite the encouraging data surfacing from the EU today, the investor uncertainty surrounding the ECB's future monetary policy is clearly placing downward pressure on the EUR/USD.

If the currency pair should fall beneath April lows we could see the selloff pickup pace towards the highly psychological 1.30 area. Fundamentally, we maintain our supports of 1.3192, 1.3162, and 1.3126 with fresh supports of 1.3091 and 1.3050.

To the topside, our 1.3223 and 1.3271 supports turn resistance while we hold our resistances of 1.3323, 1.3351, and 1.3375. The 1.35 area acts as a psychological barrier with 1.30 serving as a key psychological cushion. The EUR/USD is currently exchanging at 1.3195.

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