EUR/USD’s rebound from 1.1467 extended higher last week retreated after hitting 1.1655. Initial bias is turned neutral this week first. Fall from 1.1917 might have completed as a three wave correction at 1.1467. Above 1.1655 will target 1.1727 resistance first. Firm break there will solidify this bullish case and bring retest of 1.1917 high. However, break of 1.1561 will revive near term bearishness and target 1.1467 low instead.
In the bigger picture, considering bearish divergence condition in D MACD, a medium term top is likely in place at 1.1917, just ahead of 1.2 key psychological level. As long as 55 W EMA (now at 1.1306) holds, the up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2000 will carry larger bullish implications. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.
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.
