EURUSD - Bullish above 1.3618

Against a background of bearish signals for sentiment for this week, initial selling took EURUSD to lower levels for a third consecutive day Monday and to the most negative point for seven months. However, levels under 1.3500 attracted some profit taking and prices closed for minor net gains. While the rally is providing only weak signals and is expected to be temporary, the immediate bias is likely to be positive and so our call is Bullish above 1.3618. The immediate objective is yesterday's 1.3695 peak, with a move beyond that point then exposing sentiment to 1.3728 and 1.3768, half of Friday’s net losses.
The risk to this call is that the improvement was more temporary and limited than currently assessed and this would be signalled by a move below 1.3618, the overnight low. Prices and sentiment should then fall to 1.3556, yesterday's European afternoon base, or even Monday’s 1.3497 low point.