By: Tradehits.com
EUR/USD's strong rebound and break of 1.3699 last week suggests that the pull back from 1.3892 has completed at 1.3507 already. Initial bias remains mildly on the upside this week for 1.3892 first. Break will resume the larger rally and should target 1.4 psychological level next. Meanwhile, below 1.3623 minor support will dampen this case and turn focus back to 1.3507 support instead.
In the bigger picture, overall price actions from 1.6039 are viewed as a corrective pattern. The choppy rise from 1.2042, as a leg inside the pattern, is still in progress. Such rise could extend to 100% projection of 1.2042 to 1.3710 from 1.2755 at 1.4423. But we'd be cautious on strong resistance below the long term falling trend line (now at around 1.45) to limit upside. Meanwhile, break of 1.3294 support is needed to be the first signal of medium term reversal. Or, outlook will stay bullish.
In the long term, the EUR/USD turned into a long term consolidation pattern since reaching 1.6039 in 2008. Such consolidation is still in progress. And break of 1.2042 will likely pave the way to 61.8% retracement of 0.8223 to 1.6039 at 1.1209. Before that, EUR/USD would continue to engage in sideway trading between 1.1875 and 1.5143 in medium term.
This analysis was provided by TradeHits, a top binary options broker.