EUR/USD Weekly Outlook

After being supported at 1.3112, EUR/USD rebounded strongly to 1.3516 last week before turning sideway. With 1.2928 support as well as 55 days EMA intact, rise from 1.2456 should still be in progress. Initial bias remains on the upside this week as long as 1.3322 minor support holds. Further rise should be seen towards 1.3737 resistance first and break will confirm that rise from 1.2456 has resumed for 1.3822 (61.8% retracement of 1.4719 to 1.2456 at 1.3855). On the downside, though, below 1.3322 will be the first signal that rise from 1.3112 has completed. Further break of this support will put focus back to 1.2928.

In the bigger picture, recent development suggests that EUR/USD is still bounded in sideway consolidation that started at 1.2329, with rise from 1.2456 as the third leg. At this moment, there is no sign that such rise from 1.2456 has completed and we're still slightly favoring the case for it to extend to 1.4719 or above. But even in such case, upside should be limited by 1.4867 resistance and bring down trend resumption. On the downside, below 1.2928 support will indicate that rise from 1.2456 has completed earlier than we thought and will put focus back to 1.2329/2456 support zone.

In the long term picture, outlook is rather unclear for the moment. While 1.6038 is no doubt an important long term top, there is no clear answer on whether subsequent price actions from 1.6038 are unfolding as sideway consolidation, deep correction, or a reversal in trend. Nevertheless, note that another fall is still in favor as long as 1.4867 resistance holds and in such case, EUR/USD should at least have a test of 1.1639 long term support.