Technical outlook:
The EUR/USD pair has dropped lower than our immediate expectations, breaking below 1.1180 support as seen on the 4H chart displayed here. Profits should be booked for short positions taken from last Friday around current price action at 1.1140/50 levels. Looking into the wave structure, a slight pullback on higher side can be expected going forward, before EUR/USD continues to drift lower again. The resistance zone is just around 1.1220/30 levels where fibonacci 0.618 is also converging with the dropping trendline. Ideally prices should stay below 1.1289/90 levels, which is immediate resistance now. Any intraday/interday rallies from here should be well capped below 1.1290 levels as shown above. The alternative count could be that prices retrace the entire drop between 1.1412 through 1.1140 levels and then reverse lower. In both the above scenarios, we expect prices to rally from current levels and provide opportunities to sell higher again.
Trading plan:
Please remain flat for now; look to sell again around 1.1220/30, stop at 1.1290 levels, target is open.
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com