Near term turning point....

Indeed, E$ tested to a low of 1.2796 before rebounding and closed the week at around 1.2835. As I have mentioned in "Mixed signals...." (17 May Fri), the waning downside momentum, coupled with an extreme o/s condition resulted in a rejection in the 1.2800 area. At this point, bullish convergence has emerged and this has increased the probability of a near term base. A potential reversal within a full moon zone, which starts from this Wednesday and possibly into next Monday, will certainly makes things a whole lot more interesting and exciting.
Considering a 40% jump in the net euro short positions from the previous week, market does look more susceptible to shortcovering.

CFTC COT report: Speculator's account as of 14 May 2013
EUR: -46,921 vs -33,533
JPY:   -88,407 vs -78,560

Asia order book:
Stop loss: 1.2800/790 and 1.2890/900
Limit: 1.2950

Primary trend: Bullish
Intermediate trend: Bullish (unless 1.27447 is breached)
Minor trend: Bullish for 1.3000 (initial target)

Technically, shorter intraday indicator is getting into o/b level whereas the longer intraday/daily are still in o/s zone. Intraday oscillator indicator suggest range consolidation. Taking all available technical signals into consideration, I expect today's range from 1.2810/20 to 1.2890/900. Risk/reward favours buying on dips.

E$ 8hourly chart - Bullish convergence