EUR/USD edged higher to 1.1960 last week but turned into sideway trading since then. Initial bias remains neutral this week first. As long as 1.1712 support holds, another rally is in favor. Above 1.1960 will target 1.2091 high first. Break will extend the medium term up trend from 1.0339 to 61.8% projection of 1.0569 to 1.2091 from 1.1553 at 1.2494, which is close to 1.2516 long term fibonacci level. On the downside, break of 1.1712 will indicate completion of the rise from 1.1553 and turn near term outlook bearish.
In the bigger picture, rise from 1.0339 medium term bottom is seen as a corrective move for the moment. Therefore, in case of another rally, we’d be expect 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 to limit upside and bring reversal. Meanwhile, sustained trading below 55 week EMA (now at 1.1410) will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.
In the long term picture, 1.0339 is now seen as an important bottom as the down trend from 1.6039 (2008 high) could have completed. It’s still early to decide whether price action form 1.0339 is developing into a corrective or impulsive move. On the upside, strong resistance could be seen from 38.2% retracement of 1.6039 to 1.0339 at 1.2516. On the downside, we’re not anticipating a break of 1.0339 in near to medium term.