Technical outlook:
EUR/USD has probably changed the near-term trend after its 11-month-old trend line support broke on Monday. The single currency pair dropped through the 1.0875 lows during the New York session before bouncing back through 1.0930. The instrument is seen to be trading close to 1.0915 at this point in writing and it is expected to drop lower towards 1.0830.
EUR/USD might have terminated a larger-degree upswing around 1.1275 formed in mid-July. The price has dropped by almost 400 pips since then as the bears still target 1.0830, the previous triangle termination support. Also, note that the potential remains for a continued drop towards 1.0500 before prices find some interim support.
EUR/USD has potentially confirmed a near-term trend reversal as prices break below the 1.0900 handle. If the entire boundary between 0.9535 and 1.1035 is being retraced, prices could drop through 1.0200 in a few trading sessions. Besides, note that 1.0200 is the Fibonacci 0.618 retracement of the larger-degree upswing. Hence, the probability remains high for a bullish turn.
Trading idea:
Potential drop towards 1.0775 in the near term against 1.1275
Good luck!
