[Calxy]

EUR/USD is threatening a close that will break a six-month-long trendline in what is shaping up to be the first major test of the bull move from the March lows of 1.2455.

Only four days ago we tested the highs of the move, so the rapid sell-off after a month and a half build up technically suggests EUR buyer exhaustion, and that a medium term top is now in place.

It could suggest a shift to a 1.44 - 1.50 range near term.

EUR bears (human or computer models) would have probably entered into seemingly low risk trades by selling EUR around the 1.5000 level on Friday (with a 1% stop above 1.5150). They may have added to positions around 1.4820 on Monday and trailed stops back to the original entry level. They will be looking for confirmation that the trendline breaks and then that the next bounce can't get back above 1.4800 (yesterday's close and the multiple lows of November).

Hedgers that are long EUR/USD into 2010 should grow increasingly more concerned if there is an (a) acceleration of losses, (b) the next bounce can't overcome the 1.48 level and then (c) if the 1.44 level is ultimately taken out.