Daily Pivots: (S1) 1.2488; (P) 1.2672; (R1) 1.2955

EUR/USD’s strong rebound from 1.2389 indicates that an intraday low is in place and more importantly, it invalidated the triangle breakout scenario and suggests that consolidation from 1.2329 is still in progress. Intraday bias is flipped back to the upside and further rebound could be seen towards 1.3290 high. Though, there is no change in the broader view that price actions from 1.2329 is merely consolidation in the larger down trend. Upside of the current rise from 1.2389 is still expected to be limited below 1.3768 cluster resistance and bring down trend resumption. On the downside, below 1.2591 will turn intraday outlook neutral again. Further break of 1.2389 will be an important indication that recent down trend has resumed for next target of 50% retracement of 0.8223 to 1.6038 at 1.2131

In the bigger picture, as discussed before, the strength of the fall from 1.6038 reinforces the case that whole decline from 1.6038 is developing into a five wave impulsive fall. The completed decline from 1.4867 to 1.2329 might represent the third wave decline in the five wave sequence. Consolidation from 1.2329 might represent the fourth wave consolidation. Hence, another decline is still expected before making a medium term bottom. Below 1.2329 will target next long term fibonacci level of 50% retracement of 0.8223 to 1.6038 at 1.2131 or even further to 1.1639 key medium term support. On the upside, sustained break of 1.3768 cluster resistance (38.2% retracement of 1.6038 to 1.2329 at 1.3746) is needed to invalidate this view and indicate that whole decline from 1.6038 has made a medium term bottom.