EUR/USD edged lower to 1.3427 initially last week but rebounded from there. Friday's acceleration suggests that correction from 1.3860 is completed with three waves down to 1.3427 already, after drawing support from 55 days EMA. Initial bias is cautiously on the upside. Break of 1.3743 resistance will confirm this case and argue that whole rise from 1.2873 is resuming. Further break of 1.3860 will target 61.8% projection of 1.2873 to 1.3860 from 1.3427 at 1.4037. On the downside, though, below 1.3545 minor support will flip bias back to the downside to extend the correction from 1.3860.

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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