Technical outlook:
EURUSD has been drifting sideways in a potential triangle since hitting 1.2245 highs last week. Probability remains for a push higher towards 1.2260 levels before turning lower again. Looking at the price action, bears could be just away from one more shallow high, before they are back. Upside remains limited from here and 1.2350 remains bottom line for bears to stay in control.
EURUSD trades less than 20 pips away from recent swing highs around 1.2228/30 at this point in writing and if a contracting triangle is unfolding, prices might reverse lower towards 1.2290 levels at least. Immediate interim resistance is around 1.2245, followed by 1.2350; while support comes around 1.2160 levels respectively. A break below 1.2160 would instill further confidence in the bearish setup.
The corrective rally from 1.1704 until 1.2245 seems to be either complete or could be very close to termination around 1.2250/60 levels. Watch out for a swift bearish reversal thereafter and price break below 1.2160 levels, for a confirmation of trend reversal. Also note that back side of the former trend line support has been tested around 1.2245 levels, which is strong resistance zone now.
Trading plan:
Remain short, add more @ 1.2250/60, stop @ 1.2350, target @ 1.1300
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com