EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2487; (P) 1.2547 (R1) 1.2586; More.....

The sharp decline in EUR/USD today and break of 1.2406 support suggests that fall from 1.2747 has resumed. More importantly it argues that corrective pattern from 1.2287 has completed at 1.2747 already. Intraday bias is back on the downside for a test on 1.2287 low first. Break there will confirm resumption of whole decline from 1.3486, and that from 1.4939 and should target 61.8% projection of 1.3282 to 1.2287 from 1.2747 at 1.2132 next. On the upside, though, above 1.2527 minor resistance will mix up the near term outlook again and turn bias neutral.

In the bigger picture, fall from 1.4939 is treated as a falling leg inside the consolidation pattern that started at 1.6039 (2008 high) and could extend to 1.1875 low and below. In that case, though, strong support is expected from 1.1639/1875 support zone to contain downside and bring rebound. After all, such consolidation would extend further inside range of 1.1639/6039 for some more time. On the upside, break of 1.3486 resistance is needed to indicate completion of fall from 1.4939. Otherwise, outlook will stay bearish even in case of strong rebound.

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