Despite dipping to as low as 1.3483, subsequent strong rebound on bullish convergence condition in 4 hours MACD argues that fall from 1.4246 might be a correction only. Such correction has possibly finished with three waves down to 1.3483 already. Near term focus will be back on 1.3858 resistance. Break will affirm the bullish case and should bring a retest on 1.4246 resistance first. Nevertheless, below 1.3483 will indicate that fall from 1.4246 has resumed and should target a test on 1.3145 support instead.

In the bigger picture, firstly, consolidation from 1.6039 is still in progress. Secondly, as long as 1.3145 support holds, rise from 1.1875, which is a leg inside the consolidation pattern, is still in progress. Break of 1.4939 will resume such rally. But even in that case, we'd watch for reversal signal as EUR/USD enters into 1.5143/6039 resistance zone, and anticipate a reversal there to bring another medium term decline to continue the consolidation from 1.6039. On the downside, break of 1.3145 will in turn shift favor back to the case that another falling leg is already started at 1.4939 and would target 1.1875 support next.

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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