EUR/USD attempted to end the recovery from 1.3003 last week but downside was contained at 1.3138 and such recovery resumed. Initial bias is mildly on the upside this week and break of 1.3290 will target a test on 1.3486 resistance. Break there will confirm resumption of whole rebound from 1.2625 and should target 61.8% retracement of 1.4246 to 1.2625 at 1.3627 next. On the downside, below 1.3138 minor support will flip bias back to the downside. Further break of 1.3003 will extend the fall from 1.3486 and should revive the case that 1.2625 is finished.

In the bigger picture, price actions from 1.6039 (2008 high) are treated as a long term consolidation pattern and there is no clear indication of completion yet. That is, price actions could remain corrective and relatively unpredictable. Current development suggest that the falling leg from 1.4939 is not finished yet and break of 1.2625 should pave the way to 1.1875 low. On the upside, we'd prefer to see sustained trading above 55 weeks EMA (now 1.3540) to indicate the start of another rising leg inside the pattern.

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. The range sounds a bit uselessly large but yes, it's that large. For long term traders, anywhere below 76.4% retracement of 1.1639 to 1.6039 at 1.2677 could be treated as a buy zone while above 23.6% retracement at 1.5001 is a sell zone, until there is clear indication of breakout.