EUR/USD Daily Outlook

Daily Pivots: (S1) 1.2555; (P) 1.2634; (R1) 1.2686; More

EUR/USD edges lower to 1.2581 but after all it's still staying in converging range. Though, intraday bias remains on the downside as long as 1.2775 minor resistance holds. Further fall is expected for retesting 1.2423 support. Break will indicate that consolidation from 1.2329 has likely completed and recent down trend is resuming for 50% retracement of 0.8223 to 1.6038 at 1.2131 next. On the upside, above 1.2775 will turn intraday outlook neutral again. Further break of 1.3080 resistance will indicate that rise from 1.2423 is still in progress for 1.3290 resistance or above. Though, upside is still expected to be limited below 1.3768 cluster resistance and bring down trend resumption.

In the bigger picture, as discussed before, the strength of the fall from 1.6038 reinforces the case that whole decline from 1.6038 is developing into a five wave impulsive fall with first wave completed at 1.3881, second at 1.4867, third at 1.2329. Consolidation from 1.2329 might represent the fourth wave consolidation. Hence, another decline is still expected before making a medium term bottom. Below 1.2329 will target next long term fibonacci level of 50% retracement of 0.8223 to 1.6038 at 1.2131 or even further to 1.1639 key medium term support. On the upside, sustained break of 1.3768 cluster resistance (38.2% retracement of 1.6038 to 1.2329 at 1.3746) is needed to invalidate this view and indicate that whole decline from 1.6038 has made a medium term bottom.

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