Technical outlook and chart setups:
The EUR/USD pair has bounced off up to 300 pips after hitting lows at the levels of 1.2200 early this week. The pair pulled back into the levels of 1.1260 today, before rallying higher through the handle at 1.1340. Immediate support is seen at 1.2220 levels, followed by 1.1100 and resistance is seen at 1.1420 (interim) followed by the level of 1.1620 and higher, respectively. It is recommended to initiate long positions now with risk below at 1.1100 and a minimum upside potential through 1.1620/50. It is too early to predict a reversal but a potential inverted head and shoulder reversal is shaping up on hourly charts. A break of 1.1650 levels would confirm a trend reversal (a large pullback rally) on the 4H chart as well.
Trading recommendations:
Initiate long positions now at 1.1340/50, stop at 1.11 and target at 1.1650.
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com
