EUR/USD Daily Outlook

Daily Pivots: (S1) 1.4008; (P) 1.4056; (R1) 1.4128; More

EUR/USD's break of 1.4137 resistance suggests that rebound from 1.3747 is resuming. While upside momentum is unconvincing for the moment, intraday bias remains mildly on the upside as long as 1.3982 minor support holds. Break of 1.4171 will target retest of 1.4337 high. While another high above 1.4337 cannot be ruled out, we'd continue to expect diminishing momentum as EUR/USD meet trend line resistance (now at 1.4400). On the downside, though, below 1.3982 will be the first signal choppy recovery from 1.3747 has completed and will flip intraday bias back to the downside. Further break of 1.3826 support will indicate that fall from 1.4337 is likely resuming for trend line support (now at 1.3489).

In the bigger picture, rise from 1.2456 is treated as the third leg of medium term triangle consolidation from 1.2329 (first leg completed at 1.4719, second at 1.2456). It's possible that such rise has completed at 1.4337 already. Break of 1.3747 will add more credence to this case and firm break of channel support (now at 1.3489) will confirm and bring deeper fall to 1.2456/2884 support zone. Though, in such case, as we're favoring that it's developing into triangle consolidation, downside should be contained by 1.2456/2884 support zone and bring one more rise to complete the consolidation.

On the upside, above 1.4171 will delay the bearish case and indicate that rise from 1.2456 is still in progress. Nevertheless, as this rise is still treated as part of the medium term consolidation, it should be limited by 1.4719/4867 resistance zone. Hence, upside potential should be limited and focus will still be on reversal signal in case of another rise.

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