EURUSD preparing to push higher towards 1.2000/40 handle

Technical Analysis:

EURUSD has been drifting sideways since printing lows at 1.1835 early this month. It has reached 1.1980/90 handle twice in the past 2 weeks and bears have rejected further upside. A failure to break higher will see a continued drop towards 1.1750 levels going forward.
Looking at the short-term wave structure since 1.2242 highs, EURUSD seems to have carved lower degree waves I, ii, and iii around 1.1992, 1.2113, and 1.1835 levels respectively. Furthermore, a sideways wave iv might be in place just below 1.2000 handle.
If the above structure holds well, EURUSD might be heading lower from here and push through 1.1750 levels at least. This could be terminated at larger degree Wave 3, giving way for a Wave 4 consolidation before dropping towards 1.1600 levels to complete a 5 wave impulse drop from 1.2350 highs.
Alternately, if EURO bulls are successful in pushing higher towards 1.2040 mark, it could be labeled as lower degree wave ii of 3. In the above case Wave 3 might drop much lower below 1.1600 before Waves 4 and 5 unfold.
Either way, we remain prepared for a push towards 1.1600 levels from here or from 1.2040/50 mark. Bears are looking poised to remain in control from here and break below 1.1600 mark before letting any meaningful pullback rallies.
EURUSD remains a good candidate to be sold on rallies through 1.2000/40 levels going forward. Only a consistent break above 1.2242 would change the structure and that bulls might be back in control.

Prepared by

Finacademy Technical Team