EUR/USD recovered last week but failed to break through 4 hour 55 EMA. Initial bias remains neutral this week first. On the downside, break of 1.1846 will resume the fall from 1.2265, as the third leg of the consolidation pattern from 1.2348, to 1.1703 support. On the upside, sustained break of 4 hour 55 EMA (now at 1.1971) will bring stronger rise back to 1.2265 resistance instead.
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. Reaction from 1.2555 should reveal underlying long term momentum in the pair. However sustained break of 1.1602 will argue that the rise from 1.0635 is over, and turn medium term outlook bearish again.
In the long term picture, focus remains on 1.2555 cluster resistance (38.2% retracement of 1.6039 to 1.0339 at 1.2516). Sustained break there should confirm long term bullish reversal and target 61.8% retracement at 1.3862 and above. However, rejection by 1.2555 will keep medium term outlook neutral first, and raise the prospect of down trend resumption at a later stage.