Technical outlook:
EURUSD rallied through 1.0275 on Wednesday before hitting resistance. The single currency pair immediately pulled back over 100 pips towards 1.0180 and is now trading close to 1.0220 at the time of writing. The potential remains for a drag through the 1.0110-20 levels in the near term as bears are coming back in control in the near term.
EURUSD has been in a downtrend since January 2022 and has probably completed its larger-degree downswing between 1.2350 and 0.9952. Alternatively, the currency pair could make one more drop towards 0.9500 but after producing a meaningful pullback rally. Potential near-term targets for the corrective rally are towards 1.0800.
EURUSD is also facing the Fibonacci 0.382 retracement of the entire drop towards 1.0800 as seen here, marked in a rectangle. Bears might be inclined to come back in control thereafter. Also, note that immediate price resistance is seen towards 1.0615, followed by the 1.0720-50 zone respectively. Bulls are now aiming to take out those in the medium term.
Going forward:
EURUSD has carved a lower-degree upswing between 0.9952 and 1.0273 in the last few trading sessions. The currency pair is preparing to pull back in the next 1-2 trading sessions towards the 1.0075-1.0100 zone, which is the Fibonacci 0.618 of the above upswing. A high probability remains for a rally to materialize thereafter.
Trading plan:
Potential rally towards 1.0800 against 0.9950
Good luck!
