EUR/USD’s recovered to 1.1769 last week but struggled to sustain above 4 hour 55 EMA (now at 1.1721). Initial bias remains neutral this week first. On the downside, break of 1.1612 will extend the fall from 1.2011. Intraday bias will be turned the downside for 38.2% retracement of 1.0635 to 1.2011 at 1.1485, to corrective the whole rise from 1.0635. Though, on the upside, break of 1.1769 will argue that the correction have completed. Intraday bias will be turned back to the upside for retesting 1.2011 high instead.
In the bigger picture, rise from 1.0635 is seen as the third leg of the pattern from 1.0339 (2017 low). Further rally rise should be seen to cluster resistance at 1.2555 next, (38.2% retracement of 1.6039 to 1.0339 at 1.2516 ). This will remain the favored case as long as 1.1422 resistance turned support holds.
In the long term picture, the strong break of 55 month EMA is taken as a sign of long term trend reversal. Immediate focus will be on decade long trend line resistance (now at 1.1650). Sustained trading above there will add more credence to the case that down trend from 1.6039 (2008 high) has finished at 1.0339. Further break of 1.2555 cluster resistance (38.2% retracement of 1.6039 to 1.0339 at 1.2516 ) will confirm and target 61.8% retracement at 1.3862 and above.