EUR/USD’s decline from 1.1138 extended lower last week but continued to lose downside momentum. Break of 1.0779 will resume the fall, but considering bullish convergence condition in 4H MACD, downside could be contained by 1.0722 support. On the upside, break of 1.0896 will turn bias back to the upside for stronger rebound towards 1.1138. However, decisive break of 1.0722 will argue that whole rise from 1.0447 has completed, and target this low.
In the bigger picture, price actions from 1.1274 are viewed as a corrective pattern to rise from 0.9534 (2022 low). Rise from 1.0447 is seen as the second leg. While further rally could cannot be ruled out, upside should be limited by 1.1274 to bring the third leg of the pattern. Meanwhile, sustained break of 1.0722 support will argue that the third leg has already started for 1.0447 and possibly below.
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 1.1059) and break of 1.1274 resistance will raise the chance of reversal and target 1.2348 resistance for confirmation.
