Technical outlook:
EURUSD dropped through fresh intraday lows at 0.9669 on Tuesday before finding some bids coming. The single currency pair is seen to be trading close to 0.9710 at this point in writing as the bulls prepare to take control back soon. The daily chart might be preparing to produce an engulfing bullish or morning star reversal pattern from current levels. Ideally, prices hold above 0.9535 going forward.
EURUSD seems to have completed two waves of its expected corrective rally, which started from the 0.9535 lows early this month. The first leg reached up to 0.9999, while the second leg is correcting and might have found support around 0.9670 on Tuesday. Also, note that prices are holding around the Fibonacci 0.618 retracement of the previous rally between 0.9535 and 0.9999.
EURUSD is likely to produce a bullish reversal from here and proceed towards 1.0200, 1.0300-50 and even higher. Potential remains for a push through the 1.0600-50 area, which is the Fibonacci 0.382 retracement of the entire drop between 1.2350 and 0.9535 levels respectively. Immediate short-term resistance is seen at 0.9745 and a push higher will confirm that a bottom is in place.
Trading idea:
Potential rally towards 1.0200, 1.0300, and higher against 0.9500
Good luck!
