EUR/USD’s fall from 1.1814 extended to as low as 1.1335 last week but recovered since then. As a temporary low is formed, initial bias is neutral this week first. On the downside, break of 1.1335 will target 1.1300 low. Break will resume whole down trend from 1.2555 and target 1.1186 fibonacci level next. On the upside, however, break of 1.1621 resistance will extend the consolidation pattern from 1.1300 with another rise before larger down trend resumption.
In the bigger picture, corrective pattern from 1.1300 could have completed at 1.1814 after hitting 38.2% retracement of 1.2555 to 1.1300 at 1.1779. Decisive break of 1.1300 will resume the down trend from 1.2555 to 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 next. Sustained break there will pave the way to retest 1.0339. On the upside, break of 1.1814 will delay the bearish case and extend the correction from 1.1300 with another rise before completion.
In the long term picture, the rejection from 38.2% retracement of 1.6039 to 1.0339 at 1.2516 argues that long term down trend from 1.6039 (2008 high) might not be over yet. EUR/USD is also held below decade long trend line resistance. Firm break of 61.8% retracement of 1.0339 to 1.2555 at 1.1186 should at least bring a retest on 1.0339 low.
