EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3894; (P) 1.3983; (R1) 1.4107; More

Intraday bias remains mildly on the downside as long as 1.3987 minor resistance holds. Break of 1.3832 will indicate that fall from 1.4196 has resumed. Further break of 1.3747 will target medium term channel support (now at 1.3570). On the upside, above 1.3987 will turn intraday outlook neutral again and argue that another rise might still be seen. But even in such case, we'd continue to expect from 1.3832 to be limited below 1.4196 and bring fall resumption.

In the bigger picture, as mentioned before, 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). With daily MACD staying below signal line, it's likely 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 1.3570) 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 1.4196 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 even in case of another rise.

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