EUR/USD fell further to as low as 1.1358 last week but recovered just ahead of 1.1323/53 key support zone. Initial bias stays neutral this week first. On the upside, firm break of 1.1495 resistance should confirm short term topping and bring stronger rebound. However, sustained break of 1.3123/53 will carry larger bearish implications.
In the bigger picture, with 38.2% retracement of 1.0176 to 1.2081 at 1.1353 intact, price actions from 1.2081 are viewed as a corrective pattern in the larger up trend from 1.0176 (2025 low). Break of 1.2081 is expected at a later stage after the correction completes. However, sustained break of 1.1353 will raise the chance of medium term trend reversal. That is, rise from 0.9534 (2022 low) has completed with three waves up to 1.2081, after rejection by 1.2. That would set up deeper fall to 61.8% retracement at 1.0904 next.
In the long term picture, 38.2% retracement of 1.6039 to 0.9534 at 1.2019, which is close to 1.2000 psychological level is the key for the outlook. Rejection by this level will keep the multi decade down trend from 1.6039 (2008 high) intact, and keep outlook neutral at best. However, decisive break of 1.2000/19, will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.
