EUR/USD's rally from 1.1875 extended further last week and reached as high as 1.3332. Mentioned 1.31 cluster resistance was taken out, which indicates that fall from 1.5143 is finished. Initial bias remains on the upside this week and further rise should be seen towards 50% retracement of 1.5143 to 1.1875 at 1.3509 next. On the downside, below 1.3118 minor support will turn intraday bias neutral again and bring consolidations. But after all, break of 1.2731 support is needed to indicate that EUR/USD has topped. Otherwise, outlook will remain bullish.
In the bigger picture, considering bullish convergence condition in weekly MACD and the strength of the rebound from 1.1875, correction from 1.6039 might be completed at 1.1875 already. Focus now turns to 55 weeks EMA (now at 1.3440). Sustained trading above there will affirm this case and target upper trend line resistance (1.6039, 1.5143, now at 1.4699). On the downside, though, break of 1.2731 will indicate that a short term top is at least formed and will turn focus back to 1.2149/2466 support zone to determine whether medium term correction from 1.6039 is still in progress.
In the long term picture, considering the five wave impulsive structure of the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 support to contain downside and bring another long term up trend. However, note that sustained break of 1.1209 key fibonacci level will dampen this view and open up the case of a take on parity.