Technical outlook:
The 4H chart for EUR/USD has been presented here for a medium-term wave structure. The EUR/USD pair hit 1.1420 levels last week, probably completing an impulse (5 waves) rally from 1.1235 levels. Ideally a 3-wave corrective drop could be underway, which could push prices lower towards 1.1330 or even around 1.1300/05 levels respectively. Please note that fibonacci convergence is seen at 1.1328 and 1.1270 levels which are the 50% and 78.6% retracements of the previous rally. If prices unfold as above, we should see a corrective drop terminating at above levels before the rally resumes towards 1.1500, 1.1700 and 1.1800 levels respectively. Please note that prices should remain above 1.1235 levels for the above count to hold true. If we see prices breaking below 1.1235 levels, it may further drop towards 1.1185 levels before it finds support again.
Trading plan:
1. Aggressive: Remain short with stop above 1.1420 target is 1.1330 and 1.1310
2. Conservative: Flat for now. Buy @ 1.1330/10, stop below 1.1235, target is open.
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com