Technical outlook:
The 4H chart view indicates that EUR/USD has confirmed its first leg towards larger down trend and that it is moving towards parity levels moving forward. As seen here, the drop from 1.0829 level has unfolded into an impulse and looks to be complete. Furthermore, the support at 1.0580 level has also been taken out by the bears, registering themselves to push further lower. Structurally, the pair should produce a countertrend rally towards 1.0650 and subsequently 1.0700/20 levels which is also Fibonacci 0.618 resistance as shown here. The pair should produce a short-term rally through the levels above and then reverse lower towards the larger trend moving towards 1.0000 level in the next few weeks. A short-term wave count has also been shown here on an hourly chart for better wave clarity.
Trading plan:
An aggressive trade setup may initiate longs with a tight stop below today's lows, targeting higher levels as depicted above. On the other hand a more conservative trade strategy may remain flat for now, waiting to sell higher.
Aggressive:
Long now, stop at 1.0490, and target 1.0650 and 1.0720.
Conservative:
Flat now. Sell higher at 1.0720/30, stop at 1.0850, and target 1.0000.
Fundamental outlook:
USD Consumer Price Index is expected at 2.4% versus 2.1% year-to-year. It is scheduled at 08:30 AM EST today. It should have medium to heavy impact on the pair.
Good luck!
