EUR/USD's rally from 1.1323 stalled at 1.1710 last week and the pair has traded sideways since. Analysts at ActionForex see a neutral bias this week, with 1.1565 support expected to hold before another push higher. A firm break above 1.1791 would open the door to a retest of the 1.2081 high.
The euro's advance against the dollar has paused after an extended run. EUR/USD's rally from 1.1323 extended further to 1.1710 last week before turning sideways.
Initial bias is neutral this week, according to the outlook, allowing for consolidation. Downside should stay contained by 1.1565 support to set up another rally. On the upside, a move above 1.1710 would target the 61.8% retracement of the 1.2081-to-1.1323 decline at 1.1791, with a firm break there bringing a retest of the 1.2081 high.
The bigger-picture view treats the fall from 1.2081 as a corrective pattern that completed at 1.1323, after the pair hit the 38.2% retracement of the 1.0176-to-1.2081 range at 1.1353. A firm break of 1.2081 would resume the broader uptrend from 1.1716, remaining the favored case as long as the 55-day EMA, now at 1.1520, holds on any retreat.
Looking further out, the 38.2% retracement of the 1.6039-to-0.9534 range at 1.2019, close to the 1.2000 psychological level, is described as the key level for the long-term outlook. Rejection there would keep the multi-decade downtrend from the 2008 high of 1.6039 intact, keeping the outlook neutral at best. A decisive break of 1.2000/1.2019 would suggest a long-term bullish trend reversal, targeting the 61.8% retracement at 1.3554.
Source: ActionForex
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