EUR/USD's fall from 1.5143 extended further to as low as 1.4261 last week and the development is inline with the view that is has topped out in medium term already. Initial bias remains on the downside this week and further decline should be seen towards 38.2% retracement of 1.2329 to 1.5143 at 1.4068 next. On the upside, above 1.4424 minor resistance will turn intraday bias neutral and bring consolidations. But upside should be limited by 1.4589 resistance and bring fall resumption.

In the bigger picture, medium term rise from 1.2456 has completed at 1.5143 on bearish divergence conditions in daily MACD. Focus now turns to 1.3737 cluster support (50% retracement of 1.2329 to 1.5143 at 1.3736). Decisive break there will also confirm the case that three wave consolidation from 1.2329 has finished at 1.5134 too. In other words, whole medium term term fall fro 1.6039 should be resuming for a new low below 1.2329. On the upside, above 1.5143 is needed to invalidate this view. Otherwise, outlook will now remain bearish.

In the long term picture, the lack of impulsive structure of the rise from 1.2329 argues that it's the second wave of the wide range correction that started from 1.6039. Another medium term decline could still be seen to 1.2329 and below. Break of 1.1639 support is possible based on 100% projection of 1.6039 to 1.2329 from 1.5143. But downside will likely be contained by 61.8% retracement of 0.8223 to 1.6039). After all, the long term up trend from 0.8223 is set to resume after completing the three wave medium term correction from 1.6039.

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