Technical outlook:
The EUR/USD pair is into its 5th wave of the rally that began in 2017 since 1.0350 levels. As labeled here, the probability remains for a drop towards 1.1950 levels at least as the termination point of wave 4 of a lesser degree. On the other hand, a drop towards 1.1717 levels would confirm that a meaningful top is in place at 1.2323 levels and that prices should drop lower into 3 waves at the same degree. In that case, the drop could extend towards 1.1000 levels as highlighted through Fibonacci ratios between 1.0350 and 1.2323 levels respectively. Furthermore, the pair has produced an ideal pin bar candlestick pattern on the weekly chart (not highlighted here), which is an indication of a potential bearish reversal this week. Interim resistance remains at 1.2323 levels for now.
Trading plan:
Please continue holding short positions, for now, stop above 1.2323 levels, target 1.1950 levels at least.
US Dollar Index chart setups:
Technical outlook:
The US Dollar index might have completed 5 waves drop since January 2017 from 103.80 levels. The index had formed lows at 90.20 levels last week before pulling back higher again. The index is expected to rally at least towards 92.60/70 levels as part of wave 4 terminations of a lesser degree and then drop lower to complete its 5th of 5th wave drop. On the alternate side, a break above 94.00 levels would confirm that a meaningful low is already in place around 90.20 and that the index would be staging a 3 wave rally towards 98.50 levels. This has been highlighted by the Fibonacci ratios/retracements between 103.80 and 90.20 levels respectively. Furthermore, looking at oscillators, bullish divergences are strongly seen on Daily charts (not shown here). Overall, buying on dips remains a favored strategy.
Trading plan:
Please hold long positions taken last week, stop at 90.00, target 92.70 levels at least.
Good luck!