Immediate focus is now on the 1.1408 support level for EUR/USD after last week’s decline. A strong break there would resume the full decline from 1.2081 and target the 100% forecast from 1.2081 to 1.1408 from 1.1848 at 1.1175. On the upside, support above 1.1499 turned resistance will shift the intraday bias to neutral again first. However, the outlook will remain slightly bearish as long as resistance remains at 1.1621, in case of a recovery.
In the bigger picture, focus is back on the 38.2% retracement level from 1.0176 to 1.2081 at 1.1353. A decisive breakout there would revive the medium-term bearish trend reversal case after the rejection of the 1.2 key cluster resistance level. Further decline we should see to 61.8% retracement levels at 1.0904. However, a strong bounce from 1.1353, followed by a break of resistance at 1.1621, will sustain the upside in the medium term.
In the long-term picture, the 38.2% retracement from 1.6039 to 0.9534 at 1.2019, which is close to the psychological level of 1.2000 is key to the outlook. Rejection at this level would keep the multi-decade downtrend from 1.6039 (2008 high) intact, and keep the outlook neutral at best. However, a decisive break of 1.2000/19 would signal a reversal of the long-term upside trend, targeting the 61.8% retracement levels at 1.3554.
