EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3808; (P) 1.3882; (R1) 1.3937; More

EUR/USD's strong rebound today and break of 1.4011 resistance dampened the immediate bearish view that it has topped out at 1.4337. Instead, the falling wedge pattern since 1.4337 argues it's merely a correction in recent rise. Intraday bias is flipped back to the upside and further rally might now be seen to 1.4337 and above. However, note that we'll continue to focus on reversal signal as EUR/USD meets medium term trend line resistance (now at 1.4413). On the downside, break of 1.3826 support will revive the bearish case that fall from 1.4337 is still in progress and will flip bias back to the downside for channel support (now at 1.3425).

In the bigger picture, today's break of 1.4011 resistance delays the bearish view and argues that EUR/USD might not have topped at 1.4337. Nevertheless, as rise from 1.2456 is still treated as part of the medium term consolidation that started at 1.2329, 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. On the downside, below 1.3826 will revive the case that EUR/USD has already topped. Further break of mentioned channel support (now at 1.3425 will confirm and bring deep decline targeting 1.2456/2884 support zone.

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