Technical outlook:
EURUSD still remains vulnerable for a drop to the 1.1700/20 levels before pulling back for a meaningful counter trend rally. Until prices break above 1.1975 interim high, bears remain in a position to drag lower towards 1.1700 in the short term. As discussed yesterday, long term traders might hold short positions while short term traders might want to take profits around 1.1700.
EURUSD is seen to be trading around the 1.1832 level at this point in writing and is expected to turn lower towards yet another low below 1.1750 mark. Immediate resistance is seen around 1.1975 while support comes in around the 1.1700 level respectively. Also note that prices are breaking below its 15 month old trend line support, which is quite bearish.
EURUSD medium term potential remains to the 1.1300 and 1.0636 level respectively. The fibonacci 0.618 retracement of past rally between 1.0636 and 1.2350 is also seen to be passing through 1.1300 levels hence probabilities for a bullish bounce remains high. At the moment, we shall watch out for a temporary pullback rally around the 1.1700 mark.
Trading plan:
Remain short, stop @ 1.2350, target @ 1.1300 and lower.
Good luck!
