Technical outlook:
EURUSD rallied through 1.0925 intraday on Thursday before finding resistance and pulling back. The single currency pair has since dropped close to 100 pips towards the 1.0825 lows early on Friday and is seen to be trading close to 1.0835 at this point in writing. Ideally, prices would stay below interim resistance at 1.1030 and continue lower below 1.0500.
EURUSD has tested the Fibonacci 0.786 retracement of its drop between 1.1030 and 1.0535 earlier. The bears are looking poised to come back in control against 1.1030 as prices have carved a shooting star candlestick pattern on the daily chart. A high probability remains for an Evening Star bearish pattern to complete by the end of the day.
EURUSD has completed two waves of the larger-degree corrective phase, which had begun from 1.1030 earlier. The final wave is poised to drop below 1.0500 and possibly extend through 1.0250 in the next few weeks. Also, note that potential remains for a test of 1.0100, which is the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.1030 levels respectively.
Trading idea:
A potential drop towards 1.0100 against 1.1030
Trading plan:
