>EUR/USD’s rebound from 1.2456 extended further last week and rose sharply higher to 1.3737 before retreating mildly. As discussed before, with 1.3329 resistance firmly taken out, fall from 1.4719 is confirmed to be completed already. With an intraday top in place, as suggested with 4 hours MACD crossing below signal line, initial outlook is neutral this week and some pull back might be seen. But after all, downside should be contained well above 1.2911 support and bring rally resumption. Above 1.3737 will target 1.3822 next. (61.8% retracement of 1.4719 to 1.2456 at 1.3855). Break will then target 1.4719 resistance.
In the bigger picture, the decisive break of 1.3329 cluster resistance invalidated the near term bearish view. Recent development suggests that EUR/USD is still bounded in sideway consolidation that started at 1.2329, with rise from 1.2456 as the third leg. Having said that, current rise might extend further to 1.4719 or above. But after all, such consolidation should be limited by 1.4867 resistance and bring down trend resumption. On the downside, below 1.2991 will turn focus back to 1.2329 low.
In the long term picture, outlook is rather unclear for the moment. While 1.6038 is no doubt an important long term top, there is no clear answer on whether subsequent price actions from 1.6038 are unfolding as sideway consolidation, deep correction, or a reversal in trend. Nevertheless, note that another fall is still in favor as long as 1.4867 resistance holds and in such case, EUR/USD should at least have a test of 1.1639 long term support.
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