Technical outlook:
EURUSD dropped below the 0.9600 handle during the New York session on Monday before finding support around 0.9580. The single currency pair has bounced back and is seen to be trading close to 0.9640 at this time of writing. We cannot rule out the possibility of yet another low below 0.9552 but the probability remains for the bulls to take control soon.
EURUSD seems to have carved a meaningful low at 0.9552 on Monday and a break above 1.0200 in the near term will confirm it. Please note that 1.0200 is initial resistance and that the bulls are eyeing that mark in the next few trading sessions. The much-awaited counter-trend rally is expected to gather pace thereafter and push the price through 1.0600 in the next several weeks.
A major Fibonacci extension has been hit around 0.9698 as projected on the daily chart here. A high probability remains for a bullish reversal from current levels. The bottom line remains for the bulls to hold prices above 0.9552 interim support/low to keep the near-term structure valid. We should watch for a potential Engulfing Bullish reversal pattern on the daily chart for further confirmation.
Trading plan:
Preparing for a bullish reversal against 0.9500
Good luck!
