EUR/USD dipped to 1.0788 last week but quickly recovered. Initial bias remains neutral this week first. On the upside, firm break of 1.0894 will resume whole rally from 1.0601, and target 61.8% projection of 1.0601 to 1.0894 from 1.0788 at 1.0969. For now, risk will stay on the upside as long as 1.0788 support holds, in case of retreat.
In the bigger picture, price actions from 1.1274 are viewed as a corrective pattern. Fall from 1.1138 is seen as the third leg and could have completed. Firm break of 1.1138 will argue that larger up trend from 0.9534 (2022 low) is ready to resume through 1.1274 high. On the downside, break of 1.0601 will extend the corrective pattern instead.
In the long term picture, a long term bottom is in place at 0.9534 on bullish convergence condition in M MACD. It’s still early to call for bullish trend reversal with the pair staying inside falling channel in the monthly chart. Nevertheless, sustained trading above 55 M EMA (now at 1.1030) and break of 1.1274 resistance will raise the chance of reversal and target 1.2348 resistance for confirmation.
