Technical outlook:
EURUSD has reversed from the 1.0874 highs registered on Monday as expected. The single currency pair has eased off and is now seen to be trading close to 1.0810 at this point in writing. A break below 1.0780 from here will be the first confirmation of a potential top in place as the bears are tightening their grip to drag prices further lower. A potential near-term target is seen around the 1.0370 level.
EURUSD has most likely completed its rally, which began from the 0.9535 lows earlier during the final quarter of 2022. A larger-degree resistance has also been taken out at 1.0786 as marked on the daily chart here. The bulls will be inclined to take a break as the bears prepare to come back in control soon and drag prices lower towards 1.0370 and down to 1.0050.
EURUSD needs to break below the 1.0481 low, which is the initial support seen on the daily chart, to confirm its beginning of a meaningful retracement lower. Prices are likely to produce at least a three-wave corrective decline from the current levels, dragging the instrument towards 1.0370 and 1.0050 respectively. The 1.0050 zone is a highly probable bullish reversal since it is the Fibonacci 0.618 retracement of the above rally.
Trading idea:
Potential drop lower against 1.0950
Good luck!
