EUR/USD Weekly Outlook

EUR/USD's consolidation from 1.3443 has likely completed at 1.3817 after failing mentioned 1.3852 resistance. Initial bias is on the downside this week for a test on 1.3435 low first. Break will confirm that whole decline from 1.5143 has resumed and should target 61.8% projection of 1.4578 to 1.3443 from 1.3817 at 1.3116 next. On the upside, above 1.3626 minor resistance will turn intraday bias neutral and delay the bearish view. Otherwise, even in case of another rise, upside is still expected to be limited by 1.3852 (38.2% retracement of 1.4578 to 1.3443 at 1.3861) and bring fall resumption.

In the bigger picture, outlook remains unchanged. The three wave rise from 1.2329 is treated as consolidation to fall from 1.6039 only and should have completed at 1.5143 already. Fall from 1.5143 is tentatively treated as resumption of the whole down trend form 1.6039 and should target a new low below 1.2329. Break of 1.4217 support turned resistance is needed to invalidate this bearish view. Otherwise, we'd expect fall 1.5143 to continue even in case of strong rebound.

In the long term picture, long term up trend from 2000 low of 0.8223 has made an important top at 1.6039 in 2008. Subsequent price actions are so far viewed as a correction only, in form of three waves. First wave has completed at 1.2329 while secondly should have completed at 1.5143. Fall from 1.5143, as the third wave of correction, is in progress and should extend to 1.1639 support, and possibly further to 100% projection of 1.6039 to 1.2329 from 1.5143. Nevertheless, we'd expect strong support from 61.8% retracement of 0.8223 to 1.6039 at 1.1209 to conclude the correction and bring another long term up trend.

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