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EUR/USD's rebounded last week indicated short term bottoming at 1.2246. Further recovery could be seen back to 1.2599 resistance. Considering bullish convergence condition in daily MACD, break of 1.2599 will be the first sign of medium term bottoming and bring stronger rebound to 1.2886 key resistance next. On the downside, break of 1.2246 is needed to confirm fall resumption. Otherwise, we'd expect more corrective trading ahead.





In the bigger picture, overall price actions from 1.6039 long term top is viewed as a corrective pattern. Fall from 1.3993 is tentatively viewed as the third leg of such pattern and should target 1.1875 low and below. On the upside, break of 1.2886 resistance will bring some consolidations first before staging another decline.





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 break of 1.2042 will likely pave the way to 61.8% retracement of 0.8223 to 1.6039 at 1.1209. Before that, EUR/USD would continue to engage in sideway trading between 1.1875 and 1.5143 in medium term.

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