EURUSD had managed to rally towards 1.1924 levels last week after carving an interim low around 1.1704 levels. After producing more than 210 pip rally, bears might be ready to produce a corrective drop towards 1.1780/90 levels at least.
Looking at the short term wave structure, EURUSD has produced a 3-3-5 flat between 1.1704 and 1.1924 levels respectively. Also note that it has reached up to fibonacci 0.382 retracement of the drop between 1.2242 and 1.1704 (marked as Wave 3).
If Wave 4 terminated as a Standard fat around 1.1924 over the last week, EURUSD bears might remain poised to drop through fresh lows towards 1.1600 and further, as Wave 5 begins to unfold from here. Alternatively, if a deeper correction is underway it would find support around 1.1780 mark.
Either way, EURUSD remains a potential sell on rallies candidate from current price action (1.1900/05), or higher towards 1.1950/1.2000 levels respectively. We shall again review the price action and structure around 1.1780 levels, going forward.
EURUSD faces strong resistance around 1.1950, followed by 1.2040 levels if prices manage to reach there. The wave structure would become clearer around 1.1780, which is fibonacci 0.618 retracement of the rally between 1.1704 and 1.1924 levels respectively.
The short term wave counts are indicating a 5-3-5 zigzag drop from current levels (1.1900/05). Also, the backside of the resistance trend line would provide enough support for a bullish reversal ahead. Watch out for price action around 1.1780/90 levels.
Finacademy Technical Team
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