EUR/USD stayed range-bound above 1.1565 last week, and ActionForex keeps its near-term bias neutral. A break below the 55-day EMA would point to a deeper pullback, while a push above 1.1659 would extend the rebound toward 1.1710. Longer term, the pair's fate still hinges on the 1.2000 psychological level.
Sideways trading keeps the near-term bias neutral
EUR/USD spent last week in sideways trading, holding above 1.1565, and the outlook for this week remains unchanged. ActionForex sets its initial bias as neutral first.
On the downside, a sustained break of the 55-day EMA, now at 1.1565, would argue that the rebound from 1.1323 has completed as a three-wave corrective move, opening the door to a deeper fall back toward that low. Meanwhile, a move above 1.1659 would keep the near-term rally intact and bring a retest of 1.1710 first.
Medium-term picture stays corrective within the uptrend
In the bigger picture, the 38.2% retracement of the 1.0176-to-1.2081 range sits at 1.1353 and remains intact. Price action since 1.2081 is viewed as a corrective pattern within the larger uptrend from 1.0176, the 2025 low. A break of 1.2081 is expected only at a later stage, once this correction completes. However, a sustained break of 1.1353 would raise the chance of a medium-term trend reversal.
Long-term outlook hinges on the 1.2000 level
The 38.2% retracement of the 1.6039-to-0.9534 range at 1.2019, close to the 1.2000 psychological level, is key to the long-term outlook. Rejection at this level would keep the multi-decade downtrend from 1.6039, the 2008 high, intact and keep the outlook neutral at best. A decisive break of 1.2000/1.2019, however, would suggest a long-term bullish trend reversal, targeting the 61.8% retracement at 1.3554.
Source: ActionForex
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