Technical outlook:
TThe EUR/USD pair is seen to be testing the diagonal resistance line for the last few hours as shown on the 4H chart. The pair has exceeded 1.0757 by a few pips and has made intraday highs at 1.0782 levels today before dropping lower. A potential bearish candlestick pattern (evening star) has been produced right at the resistance line and a bearish reversal here would confirm that wave (2) is in place at 1.0782 levels and the next major direction is lower from here. There is little doubt that the A-B-C corrective rally has almost reached the 88% percent fibonacci resistance levels but a turn around has been seen next these levels as well. A bottom line remains the 1.0830 resistance going forward. Only a push beyond 1.0850 levels would reverse the structure for the short term. Immediate resistance is seen at 1.0830, while support is seen at 1.0600 respectively.
Trading plan:
Please remain short for now, stop at 1.0850 levels target 1.0600, 1.0300 and lower.
Gold chart setups:
Technical outlook:
Gold hourly chart presents a short-term wave structure. Please note that the entire drop from $1,264 through $1,195 has been retraced up to 50% and prices are stalling at $1,232 for now. Besides, on the chart view there is a strong convergence (resistance) at fibonacci 0.618 levels around $1,232/38 levels. The 1.618 extension of the counter trend rally is converging at 0.618 resistance of the primary drop. This could prove to be a very important level for Gold to reverse lower again. A clear 5-wave rally is still absent now and hence probabilities remain for a bearish reversal pushing prices below $1195 levels before rallying further. Please refrain from taking long positions from here, in fact selling around $1,237 levels could be a good strategy. Immediate resistance is seen at $1,237, while support is at $1,195 respectively.
Trading plan:
Please remain flat for now. Look to sell around $1,237 levels, with risk at $1,247, targeting $1,175
Fundamental outlook:
On the US dollar front, the University of Michigan Confidence Report is due at 10:30 AM EST, which should be positive for the USD. Also note that overall USD strength remains intact for now. We shall update if there is any change to this structure.
Good luck!
