EURUSD seems to have carved a significant top around 1.2010 mark. Further the currency has dropped through 1.1754, breaking below the previous Wave 4 of one lesser degree. The recent pullback is expected to terminate around 1.1920/60 mark and bears would be back in control.
EURUSD had earlier dropped through 1.0636 lows before turning bullish. The currency remained in control of bulls over the next several weeks and completed a 5 wave rally from 1.0636 through 1.2010 levels. The impulse wave should be at least retraced going further.
The above impulse wave might reach 1.1160 mark over the next few weeks’ time. Also note that 1.1167 is also previous Wave 4 termination. Bulls might be inclined to take control back from there if EURUSD has to resume higher.
Alternately, the recent rally (1.0636 through 1.2010) could be a part of an expanded flat corrective wave. EURUSD might have retraced an earlier drop between 1.2555 and 1.0830 levels respectively. If that is the case, we should witness prices dropping below 1.0636.
Either way, the currency is setting up to drop from current levels or from 1.0965 mark, which is fibonacci 0.786 retracement of the recent drop between 1.2010 and 1.1754 respectively. The drop could be either 3 waves corrective or an impulse.
EURUSD remains a good candidate to be sold on rallies through 1.1850/1.1950 levels. We shall take another review around 1.1150/60 to see if bulls are inclined to regain control.
Short against 1.2010, target remains open.