EUR/USD consolidated in tight range below 1.3914 last week and the development argues that rebound from 1.3145 is still in progress. Also, considering that daily MACD has broken its down trend and turned positive, whole decline from 1.4939 might be finished with three waves down to 1.3145 too. Initial bias is cautiously on the upside this week and break of 1.3914 will confirm rise resumption and should target 61.8% retracement of 1.4939 to 1.3145 at 1.4254. On the downside, though, break of 1.3652 will indicate that rebound from 1.3145 has completed and will turn bias back to the downside instead.

In the bigger picture, current development now raises the possibility that fall from 1.4939 is finished with three waves down to 1.3145. The corrective structure in turn argues that whole rise from 1.1875 is not finished. Focus is turned to 1.4548 resistance and break will should target 1.4939 and above. But after all, recent price actions are all corrective in nature and that suggests that consolidation from 2008 high of 1.6039 is not completed yet. Hence, any rally attempt should face strong resistance between 1.5/1.6. On the downside, break of 1.3145 will revive the case that correction from 1.6039 has started the third falling leg for 1.1875 and below.

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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