EUR/USD is trading nicely lower for the last two weeks, which could be start of a new larger impulsive bearish trend. Notice that decline from 1.3400 is much larger compared to first leg down from 1.3450.

Well, as we know third waves in the middle of a five wave decline are typical the longest, so we suspect that market is forming an impulsive decline, now with back wave 3 in progress that can extend even down to 1.3020 level while market trades beneath the upper trend line of a base channel.

However, corrections and pull-backs will always occur, so don't be surprised by a retracement back to 1.3220-1.3250.

Forex Analysis by Gregor Horvat at ForexPros. com