EUR/USD's recovery after drawing support from 55 days EMA argues that the corrective rise from 1.0461 is possibly still in progress. Initial bias is mildly on the upside this week for 1.1713 resistance.
Breach there could be seen but we'd expect strong resistance from 38.2% retracement of 1.3993 to 1.0461 at 1.1810 to limit upside to complete the correction. Meanwhile, below 1.1086 will turn bias back to the downside for 1.0807 key near term support instead.
In the bigger picture, overall price actions from 1.6039 long term top is viewed as a corrective pattern with fall from 1.3993 as the third leg. Price actions from 1.0461 are viewed as correction to fall from 1.3993. Such correction could have completed ahead of 38.2% retracement of 1.3993 to 1.0461 at 1.1810. Break of 1.0461 will extend the decline from 1.3993. On the upside, break of 1.2042 support turned resistance is needed to be the first sign of trend reversal. Otherwise, we'll stay bearish and expect a new low below 1.0461 at a later stage.
In the long term picture, price actions from 1.6039 (2008 high) is viewed as a corrective move. There is no clear sign that it's completed yet. And we'll still expect more downside towards 0.8223 low as long as 1.2042 resistance holds.
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