EUR/USD Weekly Outlook
EUR/USD dipped to 1.1122 last week but recovered since then. At this point, we’re still preferring the case that corrective rise from 1.0911 has completed at 1.1365. Below 1.1122 will turn bias to the downside for 1.1042 support. Break will target a test on 1.0911 support. In case that rebound from 1.0911 extends, we’d expect strong resistance from 1.1426 to limit upside.
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 correction 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.