EURUSD remains bearish below 1.2350 levels

Technical Analysis:

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.

Prepared by

Finacademy Technical Team