EUR/USD rose to as high as 1.3757 last week but made a short term top there on bearish divergence condition in 4 hours MACD. Initial bias is mildly on the downside this week for deeper retreat. Though, we'd expect strong support above 1.3245 and bring rally resumption. As discussed before, whole decline from 1.4281 should have finished with three waves down to 1.2873 already. Above 1.3757 should bring another rise through 1.4 psychological level to retest 1.4281 key resistance first.

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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