Though the trend is down, I am expecting another rally. A break above 1.3450 and a close above the 200 would confirm my theory. In this case my first target will be 1.3470 and the second 1.3500.
I agree with your analysis, Price action is being squeezed and the obvious psychological lower target is 1.34000 which may well be the low before a push towards 1.35000. If it where to reach this level I feel we'll be in a major retracement move against the Long term down trend:) Let's see how it plays out.