EUR/USD Daily Outlook

Daily Pivots: (S1) 1.4300; (P) 1.4435; (R1) 1.4567; More

EUR/USD recovers after diving to as low as 1.4302 and break of 1.4512 minor resistance indicates that an intraday low is in place. Some consolidation could be seen but short term outlook remains unchanged. Corrective rebound from 1.3881 should have completed at 1.4867 already. Below 1.4302 will indicate that fall from 1.4867 has resumed. Further break of 1.4150 support will confirm this case and bring retest of 1.3881 low and 1.3851 key medium term support. On the upside, though, above 1.4658 will argue that rebound from 1.3881 is possibly still in progress for a test of 1.4908 key near term resistance before completion.

In the bigger picture, rebound from 1.3881 is treated as correction to whole decline from 1.6038 only and should have met upside target of 1.4629 and 1.4908 resistance zone already. Recent development argues that such correction should have completed. And the whole fall from 1.6038 is probably set to resume. As discussed before, the double top reversal pattern (1.6019, 1.6038) confirms that medium term up trend from 1.1639 has completed at 1.6038. Sustained break of 50% retracement of 1.1639 to 1.6038 at 1.3839 will encourage further decline to next target of 61.8% retracement of 1.1639 to 1.6038 at 1.3319 first.On the upside, sustained break of double top neckline resistance at 1.5284 is needed to confirm decline from 1.6038 has completely finished. Otherwise, medium term outlook will remain bearish even though the rebound from 1.3881 might be stronger than we expect.

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