EUR/USD's decline extended further as expected as reached as low as 1.2496. The break of 1.2625 confirmed resumption of whole fall from 1.4939. Initial bias remains on the downside this week. Break of 61.8% projection of 1.4246 to 1.2625 from 1.3486 at 1.2484 will target 100% projection at 1.1865 which is close to 1.1875 low. On the upside, though, 1.2619 minor resistance argue that a short term bottom is formed and could bring rebound back to 1.2824 resistance before staging another fall.

In the bigger picture, fall from 1.4939 is treated as a falling leg inside the consolidation pattern that started at 1.6039 (2008 high) and could now be heading to 1.1875 low and below. In that case, though, strong support is expected form 1.1639/1875 support zone to contain downside and bring rebound. After all, such consolidation would extend further inside range of 1.1639/6039 for some more time. On the upside, break of 1.3486 resistance should now indicate that the fall from 1.4939 is finished and will turn near term outlook bullish for stronger rebound.

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.