Technical outlook:
Yesterday, the EUR/USD pair touched the 1.1285 levels, before pulling back lower as expected. Those who have initiated short positions around the 1.1280/85 levels may continue to hold and also open more sell deals at higher levels as highlighted on the chart here. Looking into the wave structure, the drop between the levels of 1.1448 and 1.1181 can be defined as Wave 1. The subsequent rally which is corrective until now can be considered as Wave 2, terminated at 1.1285 levels yesterday. It is quite possible that the corrective Wave 2 extends higher towards the 1.1340/50 levels and will hit the Fibonacci 0.618 resistance, before reversing lower again. The bottom line for bulls is the resistance at the 1.1448 levels as presented on the chart here. Until the prices remain below that, we will consider higher sales as a safe trading strategy. Please note that once the prices break below the counter trend line (te 1.1230/35 levels), bears could accelerate and drop below the 1.1180 levels.
Trading plan:
Remain short with a stop above the 1.1448 levels for now.
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com