EUR/USD's fell sharply to as low as 1.4585 last week and the break of of 1.4626 support indicates that a medium term top should be in place at 1.5143 already. Short term outlook will remain bearish this week as long as 1.4777 resistance holds and further decline should now be seen to 1.4483 cluster support (23.6% retracement of 1.2329 to 1.5143 at 1.4479) next. On the upside, touching of 1.4777 will indicate that a short term bottom is formed and bring consolidations. But upside should be limited by 1.4902 resistance and bring fall resumption.
In the bigger picture, current development indicates that EUR/USD should have topped out in medium term at 1.5143 already. We're talking about bearish divergence conditions in daily MACD and RSI and a break of 1.4626 support. Also, EUR/USD is sustaining below 55 days EMA with daily MACD turned negative too while weekly MACD has also crossed below signal line. Beside, the three wave consolidation pattern that started from 1.2329 should have finished too. Next focus is 1.3737 cluster support (50% retracement of 1.2329 to 1.5143 at 1.3736). Decisive break there will further confirm the bearish case and argue that whole medium term fall from 1.6039 is likely resuming for a new low below 1.2329. On the upside, above 1.5143 is needed to invalidate this view. Otherwise, outlook will now remain bearish.
In the long term picture, the lack of impulsive structure of the rise from 1.2329 argues that it's the second wave of the wide range correction that started from 1.6039. Another medium term decline could still be seen to 1.2329 and below. Break of 1.1639 support is possibly based on 100% projection of 1.6039 to 1.2329 from 1.5143. But downside will likely be contained by 61.8% retracement of 0.8223 to 1.6039). After all, the long term up trend from 0.8223 is set to resume after completing the three wave medium term correction from 1.6039.
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