EUR/USD Daily Outlook

Daily Pivots: (S1) 1.3943; (P) 1.4049; (R1) 1.4109; More

EUR/USD's break of 1.4000 support suggests that choppy corrective recovery from 1.3747 has likely completed at 1.4196 already. Intraday bias is flipped back tot he downside and further fall should be seen to retest 1.3747 low first. Break will bring resumption of whole fall from 1.4337 and should then target trend line support (now at 1.3506). On the upside, above 1.4082 will delay the short term bearish case and suggests that some more choppy trading will be seen before fall resumption.

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 1.3494) 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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