EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.4300; (P) 1.4435; (R1) 1.4567; More

EUR/USD's fall from 1.4867 resumes by taking out 1.4302 low and reaches as low as 1.4150 so far. Break of 1.4512 support confirms that rebound from 1.3881 has completed at 1.4867, below 1.4908 resistance as expected. At this point, intraday bias remains on the downside as long as 1.4429 minor resistance holds. Further decline is expected to be seen to retest 1.3881 low and 1.3851 key medium term support. On the upside, above 1.4429 will turn intraday outlook neutral first but another fall is still expected after recovery.

In the bigger picture, rebound from 1.3881 is treated as correction to whole decline from 1.6038 only and should have met upside target of 1.4629 and 1.4908 resistance zone already. Recent development argues that such correction should have completed. And the whole fall from 1.6038 is probably set to resume. As discussed before, the double top reversal pattern (1.6019, 1.6038) confirms that medium term up trend from 1.1639 has completed at 1.6038. Sustained break of 50% retracement of 1.1639 to 1.6038 at 1.3839 will encourage further decline to next target of 61.8% retracement of 1.1639 to 1.6038 at 1.3319 first.On the upside, sustained break of double top neckline resistance at 1.5284 is needed to confirm decline from 1.6038 has completely finished. Otherwise, medium term outlook will remain bearish even though the rebound from 1.3881 might be stronger than we expect.

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