Technical outlook:
EUR/USD dropped to the 0.9884 low intraday on Wednesday before finding support. The single currency pair managed to pull back through 0.9930-40 thereafter and is seen to be trading close to the 0.9910 mark at this point in writing. The drop from the 1.0198 high looks corrective. Thus, there is a possibility that the pair may reverse until 0.9860 holds well.
The EUR/USD counter-trend rally, which began from 0.9860, needs to hold above that mark to remain intact and push through 1.0450 and 1.0750 in the future. A drop below 0.9860 might delay matters further as bulls prepare to come back in control from here. On the flip side, a push through 1.0055 will confirm a further upside movement and challenge of 1.0200.
EUR/USD has remained shy after breaking below the 0.9860 low, which is not confirmed by the US dollar index, which raised through the 110.58 mark, a new swing high. This could also be seen as a divergence, which indicates potential trend reversal ahead. It would be interesting to see if 0.99860 holds in the near term.
Trading plan:
Potential rally through 1.0450 and 1.0750 against 0.9800
Good luck!
