EUR/USD
EUR/USD's rally extended further to as high as 1.3158 last week before making a temporary top and retreated. Initial bias is neutral this week and we'd expect some sideway trading first. Note that the strong break of 1.2916 resistance suggests that whole pull back from 1.3330 is finished at 1.2587 already. We'd expect retreat from 1.3158 to be contained by 1.2916 resistance turned support and bring another rise. Above 1.3158 will target 1.3330 and above. However, note that break of 1.2916 will dampen this case and turn focus back to 1.2587/2643 support zone instead.
In the bigger picture, outlook is rather mixed for the moment and we'll stay neutral first. Question remains on whether medium term correction from 1.6039 is completed to 1.1875 and we have no confirmation yet. On the upside, break of 1.3330 resistance will indicate that rebound from 1.1875 has resumed and thus favor the case that EUR/USD has bottomed out. In such case, further rise should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4600). On the downside, though, break of 1.2587 support will indicate that fall from 1.5143 is still in progress for a test on 1.1639 key support. We'll see which side EUR/USD will take out before solidifying the outlook.
In the long term picture, the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 support to contain downside and bring another long term up trend.
