MArket have anticipate an increase of the interest rate by FEd based on FOMC minutes and statements from some FED officials. Although statistics show that FED has achieved its 2% inflation target, the BOARD is not ready yet to increase the interest rate because of many reason and among them suistainable growth, unemployment rate etc. On the other hand, ECB with not launch its by back program yet alto R-LTRO and ABS program is ready. Therefore at least until the end of QE3, we may see a last try of EUR on the upside, and at least an equilibrium from this oversold level. On a purely indicator analysis, the pair is at 0.382 retracement, i.e there is room for an upside baring in mind the oversold level ( see RSI, CCI and STCH). It would be very difficult to reach again 1.40 because ECB said it would intervene, but 1.366 remain an important and achievable target.
Dear Kumowizard, you may be very much right in deed. Of course above 1.34 the medium long term startegy of EURUSD is SHORT because FED will increase at some point its interest rate and ECB will flow plenty of EUR in the market with R-LTRO or ABS.
Kumowizard
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Still I'd rather use that pull back for adding to or re-building EURUSD SHORTS, than trying to catch a counter trend move with any longs. EURUSD has become a strategic short, as it is well visible from your weekly chart too. Of course anyone can try a long, or try to close exisiting shorts based on the beliefe it is oversold, but the major focus has to remain SELL when it goes higher.