EUR/USD resumed recent decline last week and dipped to 1.3384 before forming a temporary low there and recovered. Initial bias is neutral this week and some consolidations could be seen first. But upside of recovery should be limited below 1.3936 resistance and bring another fall. Below 1.3384 will target 61.8% projection of 1.4548 to 1.3498 from 1.3936 at 1.3287 and then 161.8% projection of 1.4939 to 1.3969 from 1.4548 at 1.2979, which is close to 1.3 psychological level.

In the bigger picture, current development indicates that medium term rise from 1.1875 has completed with three waves up to 1.4939 already. That also suggests that it's merely part of the consolidation pattern that started back in 2008 at 1.6039. Further decline would now be seen to 1.2873 support first and break will target 1.1875 and below. On the upside, above 1.4548, resistance is needed to confirm completion of the fall from 1.4939 or we'll stay bearish in EUR/USD.

In the long term picture, EUR/USD turned into a long term consolidation pattern since reaching 1.6039 in 2008. Such consolidation is still in progress and we'd expect range trading to continue for some time between 1.1639 and 1.6039.

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