EUR/USD's rebound from 1.2873 extended further to as high as 1.3623 last week and the strong break of 1.3496 resistance confirmed that whole fall from 1.4281 has finished at 1.2873 already. Initial bias remains on the upside this week for 1.3785 resistance first. Break will target another high above 1.4281. On the downside, below 1.3502 minor support will turn intraday bias neutral and bring retreat. But downside should be contained by 1.3245 support and bring another rise.

In the bigger picture, main question remains on whether medium term correction from 1.6039 has finished with three waves down to 1.1875. The firm break above 1.35 psychological level again affirm the case that fall from 1.4281 was merely a correction only and whole rise from 1.1875 is still in progress. Also, note that break of 1.4281 will revive the case that medium term correction from 1.6039 was completed with three waves down to 1.1875 and the long term up trend might be resuming. On the downside, though, below 1.2873 will turn focus back to 1.1875 low.

In the long term picture, considering the five wave impulsive structure of the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, firstly, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 to contain downside. Secondly, we'd expect another high above 1.6039 eventually, after correction from 1.6039 is confirmed to be finished.

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