EUR/USD Daily Forecast

Daily Pivots: (S1) 1.3987; (P) 1.4053; (R1) 1.4123;

EUR/USD failed 1.4137 resistance and retreats again. We'll continue to stay neutral until a break of 1.3826/4137 range. Above 1.4137 resistance will suggest that rise from 1.3747 is still in progress and will favor extension to 1.4337 or above. But still, upside momentum should start to diminish as EUR/USD meet trend line resistance (now at 1.4400). On the downside, below 1.3826 support will indicate that rebound from 1.3747 has completed and fall from 1.4337 is resuming, in this case, to test trend line support (now at 1.3462).

In the bigger picture, rise from 1.2456 is treated as the third leg of medium term triangle consolidation from 1.2329 (first leg completed at 1.4719, second at 1.2456). With daily MACD staying below signal line, it's likely that such rise has completed at 1.4337 already. Break of 1.3747 will add more credence to this case and firm break of channel support (now at 1.3462) will confirm and bring deeper fall to 1.2456/2884 support zone. Though, in such case, as we're favoring that it's developing into triangle consolidation, downside should be contained by 1.2456/2884 support zone and bring one more rise to complete the consolidation.

On the upside, above 1.4171 will delay the bearish case and indicate that rise from 1.2456 is still in progress. Nevertheless, as this rise is still treated as part of the medium term consolidation, it should be limited by 1.4719/4867 resistance zone. Hence, upside potential should be limited and focus will still be on reversal signal in case of another rise.

Based on ActionForex.com Technical Outlook