Daily Pivots: (S1) 1.2277; (P) 1.2303 (R1) 1.2347; ….
EUR/USD’s strong rally today and break of 1.2344 resistance firstly indicates the fall from 1.2475 has completed at 1.2214 already. Secondly, it invalidated the bearish case of larger trend reversal. Instead, price actions from 1.2555 high could merely be developing into a sideway consolidation pattern. Intraday bias is back on the upside for 1.2475/2555 resistance zone. We’d be cautious on strong resistance from there to bring another fall to extend sideway trading. On the downside, below 1.2302 minor support will turn bias back to the downside for 1.2214 instead.
In the bigger picture, key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 remains intact despite attempts to break. Hence, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. Rejection from 1.2516 will maintain long term bearish outlook and keep the case for retesting 1.0039 alive. Firm break of 1.1553 support will add more medium term bearishness. However, sustained break of 1.2516 will carry larger bullish implication and target 61.8% retracement of 1.6039 to 1.0339 at 1.3862 in medium term.
