The single currency did spend most of 2016 within indicated established range of 1.0462-1.1714 and the pair met renewed selling interest at 1.1616 in mid-2016 then started to fall late last year, euro finally broke below 2015 low at 1.0462 last month in line with our bearish expectation, adding credence to our bearish count for an impulsive decline unfolding from 1.6040 top (2008 high), hence downside bias remains for further weakness to 1.0350, then 1.0200, however, a sustained breach below psychological support at 1.0000 is needed to signal wave 3 of larger degree wave III has commenced for further decline to 0.9945-50 (50% projection of 1.3993-1.0462 measuring from 1.1714). Our bearish count remains that the major wave C with circle ended at 1.6040 back in July 2008, the series of (I)(II), I II, 1-(1.2042) 2-(1.3993) impulsive wave structure from 1.6040 is unfolding, bearishness remains for further decline to 1.0300, then 1.0150 but reckon psychological support at 1.0000 would limit downside and 0.9945-50 (50% projection of 1.3993-1.0462 measuring from 1.1714) would hold on first testing. Eventual downside targets are pointing at 0.9530-35 (61.8% projection of 1.3993-1.0462 measuring from 1.1714) and later towards 0.9300-05 (1.618 times projection of 1.4940-1.2042 measuring from 1.3993) but next psychological support at 0.9000 should hold.
On the upside, whilst initial recovery to 1.0900 or even 1.1000 cannot be ruled out, upside should be limited and price should falter well below resistance at 1.1300, bring another decline to aforesaid downside targets. A sustained breach above 1.1300 would defer and suggest a minor wave v of 3 has ended instead and risk a stronger rebound to 1.1500 and then towards resistance at 1.1616 but still reckon resistance at 1.1714 would remain intact and bring another decline later. Only a firm break above 1.1714 resistance would defer and risk a stronger retracement of the fall from 1.3993 to 1.1800-10 and then towards 1.1900, however, reckon upside would be limited to previous support at 1.2042 (wave 1 trough) and bring another decline later.