EUR/USD Daily Outlook

Daily Pivots: (S1) 1.2701; (P) 1.2890; (R1) 1.3042; More

EUR/USD's fall reaches as low as 1.2727, just inch above mentioned 100% projection of 1.6038 to 1.3381 from 1.4867 at 1.2710 and turns sideway. Nevertheless, intraday bias remains on the downside as long as 1.2984 minor resistance holds. Further decline is still expected. Sustained trading below 1.2710 will target 100% projection of 1.4867 to 1.3258 from 1.3768 at 1.2159 next. On the upside, above 1.2984 will turn intraday outlook neutral and bring recovery. But upside should be limited below 1.3285 resistance and bring fall resumption.

In the bigger picture, EUR/USD is now trading well below 55 months EMA (now at 1.3331) and has taken out 38.2% retracement of 0.8223 (00 low) to 1.6038 at 1.3053 decisively. Further break of 100% projection of 1.6038 to 1.3381 from 1.4867 at 1.2710 will add more credence to the case that whole down trend from 1.6038 is developing into a five wave impulsive decline. In other words, EUR/USD is probably just in the middle of such fall which could extend beyond 1.1639 low before forming a medium term bottom. On the upside, while some rebound might be seen, break of 1.3768 resistance is needed to be the first signal that a medium term bottom is formed. Otherwise, medium term outlook remains bearish even in case of strong rebound.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box