EUR/USD Weekly Outlook
EUR/USD’s recovery last week was limited at 1.1326, below 1.1365 resistance and reversed. Initial bias is mildly on the downside this week for 1.1122 support. Break will confirm completion of corrective rise from 1.0911. In that case, EUR/USD will target a test on this key near term support level. Meanwhile, above 1.1326 will turn bias back to 1.1365/1426 resistance zone instead.
In the bigger picture, overall price actions from 1.6039 long term top is viewed as a corrective pattern with fall from 1.3993 as the third leg. Price actions from 1.0461 are viewed as consolidation pattern to fall from 1.3993. Break of 1.0461 will extend the decline from 1.3993. On the upside, break of 1.2042 support turned resistance is needed to be the first sign of trend reversal. Otherwise, we’ll stay bearish and expect a new low below 1.0461 at a later stage.
In the long term picture, price actions from 1.6039 (2008 high) is viewed as a corrective move. There is no clear sign that it’s completed yet. And we’ll still expect more downside towards 0.8223 low as long as 1.2042 resistance holds.