EURUSD had dropped through 1.2100 levels early Friday before raising to 1.2180/85 levels post NFP. It might be carving a lower degree wave ii at the moment and could turn lower again towards 1.1924 levels soon. Bears should hold below 1.2266 levels going forward.
EURUSD had earlier dropped from 1.2350 through 1.1704 levels sub dividing into 5 waves, carving a leading diagonal. The subsequent rally between 1.1704 and 1.2266 was corrective, sub dividing into 3 waves a-b-c as labelled on the chart here.
If the above structure is correct, EURUSD has carved higher degree Waves (1) and (2) around 1.1704 and 1.2266 levels respectively. Bears might resume Wave (3) lower towards 1.1300 and 1.0636 levels going forward.
Alternately, if EURUSD stages a rally towards 1.2266 and subsequently 1.2350 mark, the structure might turn bullish again and it could further rally towards 1.2500 levels in the next few weeks. Probabilities for the above remains less though.
Immediate support is seen at 1.2050 followed by 1.1986 while resistance remains around 1.2266, followed by 1.2350 levels respectively. A break below 1.2050 would accelerate lower towards 1.1924 levels at least.
Most traders might be preparing to initiate fresh short positions around 1.2150/60 levels with risk around 1.2350 mark. Watch out for a potential bearish turn from here in the near future.
Finacademy Technical Team
EURUSD has finally reversed lower from 1.2218 highs last week, after having drifted sideways for a while. The drop was much anticipated as bears have managed to take out over 300 pips since last Wednesday. They remain poised to target below 1.1700 in the near term.
US Dollar Index has raised through 92.00 levels as of now and bulls are looking poised to extend further through 95.00, 96.00 levels in the next few weeks. It is quite possible that they continue higher from here itself or after a pullback, but prices stay above 89.60 levels.
USDJPY breaks higher towards 110.80 levels yesterday as the technical direction was clear and discussed here. At times market awaits a trigger to push through its determined trend; it was the Fed interest rate yesterday that provided the same.