EURUSD is looking to resume its drop towards 1.1000 and further as the currency hits intraday resistance around 1.1325 today. The currency had carved a meaningful lower top around 1.1365 levels, over the last week and is expected to hold below the mark.
Looking into the wave structure sine 1.1420 highs, EURO had dropped towards 1.1167 levels, which could be the first leg lower. Thereafter, a complex corrective wave unfolded and pushed prices higher through 1.1365 levels.
Also note, that the corrective rally had managed to reach fibonacci 0.618 retracement of the earlier drop between 1.1420 and 1.1167 respectively. The entire structure described above can be potential Waves 1 and 2 (not labelled today).
If the above counts hold well, EURUSD should be heading lower towards 1.1167 and 1.1000 levels, going forward. Also note that potential remains for a push below 1.0636 levels, as Wave 3 progresses. It is too early to confirm right now and a break below 1.1167 would accelerate the drop.
On the flip side, if EURUSD breaks above 1.1365 interim resistance, it would attempt to break above 1.1420 and also push towards 1.1500 levels, going further. In that cast, EURUSD would change its long term trend to bullish.
Until the above turns true, we favour bears to resume lower any moment. They have managed to test fibonacci 0.618 retracement of the drop between 1.1365 and 1.1260 respectively. Expect the down trend to resume anytime soon.
Short against 1.1420, targeting below 1.0636.
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