EUR/USD Mid-Day Outlook

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

EUR/USD recovers after hitting 1.2562 earlier today and with 4 hours MACD crossed above signal line. Consolidation from 1.2239 is still in progress and another rise could now be seen. Nevertheless, considering that such consolidation could be in form of a triangle, upside of the current recovery would probably be limited below 1.3080 resistance to complete such consolidation. Below 1.2562 will bring retest of 1.2329/2389 support zone. Break will indicate recent down trend is resuming for 50% retracement of 0.8223 to 1.6038 at 1.2131 next. however, break of 1.3080 will indicate that stronger rebound would be seen before completing the consolidation. 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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