EUR/USD Daily Outlook

Daily Pivots: (S1) 1.4043; (P) 1.4136; (R1) 1.4225; More

With 4 hours MACD back above signal line, intraday low could be in place in the EUR/USD and some more consolidation might be seen. Nevertheless, short term outlook remains bearish as long as 1.4428 resistance holds and further fall is still expected to next medium term cluster support at 1.3851 first (50% retracement of 1.1639 to 1.6038 at 1.3839). On the upside, break of 1.4428 is needed to indicate a short term bottom is in place and bring rebound. Otherwise, interim consolidation should be relatively brief and the decline from 1.6038 is still expected to extend further.

In the bigger picture, as mentioned before, the double top reversal pattern (1.6019, 1.6038) serves as an important signal of completion of medium term rise from 1.1639 (05 low). Last week's break of key support level of 1.4309, (38.2% retracement of 1.1639 (05 low) to 1.6038 at 1.4358, 61.8% retracement of 1.3262 to 1.6038 at 1.4322) and medium term trend line support (1.1825, 1.2483, now at 1.4408) further support this view. Weekly MACD turned negative too. Much deeper medium term fall is now expected to support zone of 1.1639 and 1.3668. On the upside, while some rebound could be seen, sustained break of double top neckline resistance at 1.5284 is needed before considering that decline from 1.6038 has completely finished. Otherwise, another fall is still expected even in case of strong rebound.

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