Technical outlook:
The EUR/USD pair has finally produced an engulfing bullish candlestick pattern on the daily chart as presented here. As expected, the pair is now poised to stage a counter trend rally towards the 1.1950-1.2050 handle in the next few days. The Elliott channel resistance is also seen around the same region by June 06, 2018. Please note that the corrective rally is expected to be a zigzag corrective move, since the current raise through 1.1689/90 looks to be an impulse push. Looking into the wave counts, it is now quite clear that EUR/USD has completed the waves (1) through (3) and is towards the wave (4) corrective rally through the near-term resistance at the 1.1950-1.2050 levels. Also note that the downward trend remains intact till the prices stay below the 1.2150 levels going forward. Selling on rallies remains a conservative trading strategy.
Trading plan:
Aggressive traders should remain long with stop below the 1.1500 levels, targeting 1.1950 at least.
Fundamental outlook:
watch out for Euro Zone Consumer Price Index at 0500 AM EST, followed by CAD GBP and USD PCE Core at 0830 AM EST.
Good luck!
