FX.co ★ Trading plan for EURUSD on August 31, 2022

Technical outlook:

EURUSD rose through the 1.0035 highs during the late Asia session on Wednesday after having tested the 0.9986 intraday support on Tuesday. The probability remains for yet another drop through 0.9950 during the day before resuming a rally. Bulls are looking poised to take out interim resistance at 1.0090, followed by 1.0200 and 1.0365 in the near term.

EURUSD has carved a meaningful larger-degree downswing between 1.2350 and 0.9901 as seen on the daily chart here. Ideally, a corrective rally is expected to reach up to the 1.0800-1.0900 levels before the bears are back in control. The overall downtrend would resume thereafter and drag the price towards 0.9200 going forward.

EURUSD has further produced a bullish divergence on the daily RSI as seen on the chart. Prices dropped through the 0.9901 lows earlier but the RSI refrained from printing fresh lows, hence a high probability remains for a potential bullish reversal. We expect prices to break above .0364 in the next several trading sessions.

Trading plan:

Potential rally through 1.0364 against 0.9900

Good luck!