EUR/USD rose further to as high as 1.2149 last week but retreated since then. A short term top could be formed and initial bias is mildly on the downside for deeper pull back. But downside should be contained by 38.2% retracement of 1.1703 to 1.2149 at 1.1979 to bring rebound. On the upside, break of 1.2149 will resume the rise from 1.1703 to 1.2242/2348 resistance zone.
In the bigger picture, rise from 1.0635 is seen as the third leg of the pattern from 1.0339 (2017 low). Further rally could be seen to cluster resistance at 1.2555 next, (38.2% retracement of 1.6039 to 1.0339 at 1.2516). This will remain the favored case as long as 1.1602 support holds. However, sustained break of 1.1602 will argue that whole rise from 1.10635 has completed. Deeper fall would be seen to 61.8% retracement of 1.0635 to 1.2348 at 1.1289.
In the long term picture, the case of long term bullish reversal continues to build up, with bullish convergence condition in monthly MACD, sustained trading above 55 month EMA and long trend falling trend line. Focus is now on 1.2555 cluster resistance (38.2% retracement of 1.6039 to 1.0339 at 1.2516 ). Decisive break there will confirm and target 61.8% retracement at 1.3862 and above.
