Set to correct, but don't expect much..

The EUR/USD is at a record oversold weekly RSI condition after breaking down to fresh cyclical lows on Wednesday. The 7-period weekly RSI is registering a sub-10 reading, which is very rare for the Euro or any major currency pair. This alone should limit further downside, but subsequent rallies are expected to be shallow due to the weak fundamentals and low market sentiment.

Current price-action appears to be in a bearish channel, testing the lower bounds. Short-term momentum, however, remains in the bears favor, given Wednesday's downward thrust. Key support at 1.2747 could be the next stop until the beginning of the new month. That said, Wednesday's move looks exhaustive and could be vulnerable to a small false-break pattern.