EUR/USD attempted to recover after hitting 1.2828 but failed below 1.2970 minor resistance. Initial bias is neutral this week. At this point, we'd still expect downside of the pull back from 1.3171 to be contained by 1.2816 support (38.2% retracement of 1.2255 to 1.3171 at 1.2821). Above 1.2970 will flip bias back to the upside for 1.3171. Break there will confirm resumption of recent rise from 1.2042 and target 1.3486 key resistance, which is close to 50% retracement of 1.4939 to 1.2042 at 1.3491. Though, break of 1.2816 will bring further pull back to 61.8% retracement of 1.2255 to 1.3171 at 1.2605.

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). Such decline should have completed at 1.2042 already. Break of 1.3486 will confirm and should pave the way to 1.5 psychological level in medium term. We'd now stay bullish as long as 1.25 psychological level holds.

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. 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. Traders following our reports could have accumulated some EUR/USD long since May. We'd now patiently wait for the current rise from 1.2042 to extend back towards 1.5001.