Technical outlook:
EURUSD seems to be ready to resume a move lower towards 1.1700 in the near term. The European currency has bounced back towards 1.1970 levels this week only to face some strong resistance, and has pulled back since then. Watch out for prices to drag lower and break its one year trend line going forward. Potential remains towards 1.1300 at least in the next few weeks.
EURUSD is seen to be trading at around 1.1930 levels at this point in writing as bears prepare to be back in control. Immediate resistance is seen towards 1.2100 mark, followed by 1.2266 and higher, while support comes in around 1.1700, followed by 1.1600 levels respectively. The fibonacci 0.618 retracement of previous rally between 1.0636 and 1.2350 is passing through 1.1300 mark and hence probabilities remain high for a bullish turn.
The trend seems to have turned lower since 1.2350 and might continue towards 1.1300 mark at least to complete a larger correction going further. If the drop continues further, EURUSD bears would be poised to drag further towards 1.0636 lows. We shall again review around 1.1300 whether to change the trade plan.
Trading plan:
Remain short, stop @ 1.2266, target is @ 1.1300.
Good luck!
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