Technical outlook:
The EUR/USD story continues as expected yesterday during early New York Session, when prices dropped through 1.2200/20 levels again before rallying or pulling back. The pair is seen to be trading around 1.2250/60 levels at this moment in time, and is expected to have either bottomed out at 1.2210 levels or is very close to forming one. A push above 1.2320/30 levels would confirm that a meaningful bottom is in place and that the pair would be making higher highs and higher lows from here. Please note that this rally could be the 5th of 5th wave, which is expected to terminate above 1.2537 levels before giving in to bears. Immediate price resistance is now seen at 1.2430 levels while support is at 1.2200/10 levels respectively.
Trading plan:
Aggressive traders would want to remain long with risk at 1.2210 levels.
US Dollar Index chart setups:
Technical outlook:
The US Dollar Index daily chart setup has been again presented here with emphasis on the last (5th) wave. The underlying has produced a star doji candle stick pattern on the daily chart as seen here, indicating a potential bearish reversal on cards or next week. Furthermore, also note that the index is seen to be testing its Elliott channel resistance trend line as well. A bearish reversal here would resume its 5th of 5th wave lower towards 88.50 levels at least, if not lower. Price resistance is seen at 91.00 levels while interim support is seen at 88.40 levels respectively. A bearish signal once confirmed, either today or next week would accelerate the drop towards lower levels.
Trading plan:
Prepare to go short around current levels, risk remains above yesterdays high at 90.50/60.
Fundamental outlook:
Watch out for CAD employment rate around 0830 AM EST today.
Good luck!
