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EUR/USD Pulls up After a Breakout

EUR/USD started the week falling to a fresh low on the year, then consolidating between that low around 1.3180 and a high of 1.3215. Price fell below this consolidation range during the 8/26 session, and has pulled back so far during the 8/27 session. EUR/USD looks like it is testing the just-broken consolidation as resistance. So far price is holding below the 50-hour SMA, so the bearish outlook remains in play. 

EUR/USD 1H Chart 8/27

If price can hold below 1.32, the bearish outlook still looks valid. In the bearish outlook, the next key support will be at 1.3105, which is the September 2013 low. 

A break above 1.32 however suggests the bearish outlook might be oversold and needs at least some short-term consolidation/bullish correction. A break above 1.3215 would put in a price bottom with upside at least toward 1.3260-80 area. Then we'll see what happens from there.

For the most part, the bearish outlook should be respected because there has not been a sign of reversal. Fundamental data out of the eurozone continues to be a drag on the euro. After this breakout and pullback, we should expect sellers to keep EUR/USD in a bearish trend.