EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.5545; (P) 1.5594; (R1) 1.5671; More

EUR/USD's fall from 1.6019 extends sharply lower to as low as 1.5360 in early US session touches mentioned 1.5342/66 cluster support zone. At this point, intraday bias remains on the downside as long as 1.5498 minor resistance holds. Sustained break of 1.5342/66 cluster support zone will set the stage for further decline to next short term target of 1.4966 resistance turned support. On the upside, above 1.5498 will turn intraday outlook neutral first. But another fall is still expected as long as recovery is limited below 1.5644 resistance.

In the bigger picture, as mentioned before, EUR/USD's rise from 1.4309 should have completed with a diagonal triangle pattern that started at 1.5342. Firm break of 1.5342 support, which will also have EUR/USD sustaining below 55 days EMA (now at 1.5490) too, will confirm that rise from 1.4309 has completed with bearish divergence condition in daily MACD and RSI too. In such case, deeper decline should then be seen to 1.4309 and 1.4966 support zone.

However, strong rebound from there, followed by break of 1.5644 resistance, will suggest that price actions from 1.6019 is probably just developing into another sideway consolidation. But still, risk is on the downside before sustained break of 1.6019 high.

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