EUR/USD Weekly Outlook

EUR/USD's fall extends further to as low as 1.4196 last week, taking out key medium term suppot of 1.4309, and turns sideway since then. From a short term angle, . Initial bias remains on the downside this week as long as 1.4372 minor resistance holds. Further decline could be seen to next cluster support at 1.3851 (50% retracement of 1.1639 to 1.6038 at 1.3839). Above 1.4372 will turn intraday outlook neutral first and bring consolidation. But note that there is still no clear sign of a short term bottom yet. Consolidation should be relatively brief as long as 1.4543 resietsance holds and further fall is still expected. However, above 1.4543 will indicate that a short term bottom is finally in place and bring stronger rebound to 1.4908 resietasnce and abvoe.

In the bigger picture, as mentioned before, the double top reversal pattern (1.6019, 1.6038) serves as an important signal of completion of medium term rise from 1.1639 (05 low). Last week's break of key support level of 1.4309, (38.2% retracement of 1.1639 (05 low) to 1.6038 at 1.4358, 61.8% retracement of 1.3262 to 1.6038 at 1.4322) and medium term trend line support (1.1825, 1.2483, now at 1.4408) further support this view. Weekly MACD turned negative too. Much deeper medium term fall is now expected to support zone of 1.1639 and 1.3668. On the upside, while some rebound could be seen, sustained break of double top neckline resistance at 1.5284 is needed before considering that decline from 1.6038 has completely finished. Otherwise, another fall is still expected even in case of strong rebound.

In the longer term picture, the case of completion of multi year up trend from 0.8223 (00 low) is also bulding up with monthly MACD turning below signal line and RSI breaking it's up trend. Though, it's early to conclude yet for the moment with EUR/USD still holding above 55 months EMA (now at 1.3365.) Focus will be on whether monthly MACD will break it's up trend and whether key fibo support of 38.2% retracement of 0.8223 to 1.6038 at 1.3053 for further evidence.

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