December 16 Eur/usd Outlook - Forex Forum

EUR/USD's strong rally from 1.2549 extended further to as high as 1.3736 so far, just inch below mentioned 1.3768 cluster resistance. At this point, further rally is still expected as long as 1.3430 minor support holds. As discussed before, sustained break of 1.3768 cluster resistance will indicate that whole medium term fall from 1.6038 has possibly completed and in such case, strong rally should then be seen. On the downside, though, below 1.3430 will indicate that an intraday top is at least formed and will bring decline to 4 hours 55 EMA (now at 1.3160).

In the bigger picture, note firstly that EUR/USD has now taken out mentioned medium term trend line resistance (1.6038, 1.4867). Secondly, dollar has topped out in medium term with head and shoulder top pattern completed in dollar index. Sustained break of 1.3768 cluster resistance (38.2% retracement of 1.6038 to 1.2329 at 1.3746) will indicate that whole fall from 1.6038 has made a medium term bottom at 1.2329 and will then encourage stronger rally targeting 55 weeks EMA (now at 1.4222). On the downside, sustained trading below 1.3080 resistance turned support is needed to reaffirm the case that price actions from 1.2329 are merely consolidation in the medium term down trend.