EUR/USD's sharp fall last week indicates that a short term top is at least formed at 1.3330 on bearish divergence condition in 4 hours MACD. Initial bias remains on the downside this week and break of 1.2731 support will suggest that whole rebound from 1.1875 is completed and will bring deeper decline to 1.2466 support next. On the upside, above 1.2935 will turn intraday bias neutral and bring recovery. But upside should be limited below 1.3330 and bring another fall.

In the bigger picture, while the rebound from 1.1875 was strong, it's limited below 55 weeks EMA (now at 1.3410) and reversed sharply. Break of 1.2731 support will indicate that such rebound is completed and suggest that whole fall from 1.6039 is possibly resuming. Such decline is treated as correction to long term up trend in EUR/USD and would possibly make another low below 1.1639 support before conclusion. On the upside, though, above 1.3330 will turn focus back to 55 weeks EMA and sustained trading above there will pave the wave to further rise to upper trend line resistance (1.6039, 1.5143, now at 1.4699).

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.

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