EUR/USD's rebound from 1.1323 suggests the pair's slide from 1.2081 completed as a three-wave correction, keeping the near-term bias tilted higher this week. A decisive break above 1.1621 would open the way toward 1.1791, while a drop through 1.1454 would flip the bias back down. The medium- and long-term outlook still turns on the 1.1353 and 1.2000/19 levels.
EUR/USD's rebound from 1.1323 has extended, suggesting the pair's fall from 1.2081 completed as a three-wave correction. Initial bias stays on the upside this week for 1.1621 cluster resistance, the 38.2% retracement of the 1.2081-to-1.1323 fall at 1.1613.
Break above 1.1621 needed to confirm the bounce
A decisive break there would solidify the bullish case and target 1.1791, the 61.8% retracement of the same move. But a break of 1.1454 minor support would turn the bias back to the downside, aiming for the 1.1323/1352 support zone instead.
Medium-term trend still hinges on 1.1353
In the bigger picture, the focus stays on 1.1353, the 38.2% retracement of the move from 1.0176 to 1.2081. A decisive break there would revive the case for a medium-term bearish trend reversal after the pair's rejection at the 1.2 key cluster resistance level, with further weakness projected to 1.0904, the 61.8% retracement. Nevertheless, a strong rebound from 1.1353, followed by a break of 1.1621 resistance, would retain the medium-term bullish case.
Long-term outlook turns on the 1.2000 level
Looking further out, 1.2019, the 38.2% retracement of the multi-decade slide from 1.6039 to 0.9534, sits close to the 1.2000 psychological level and remains the key marker for the outlook. Rejection there would keep the multi-decade downtrend from the 2008 high of 1.6039 intact and hold the outlook neutral at best. A decisive break of 1.2000/19, though, would point to a long-term bullish trend reversal, with 1.3554, the 61.8% retracement, as the target.
Source: ActionForex
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