EURUSD seems to have terminated a lower degree wave iv around 1.1970 mark over the last week. It has reversed lower since then and is looking to terminate wave v around 1.1730/40 levels respectively. Bears might be looking to remain in control going forward as counter trend rallies fade.
The larger degree wave structure since 1.2350 highs also presents a potential bearish outlook. The drop between 1.2350 and 1.1700 was a leading diagonal, sub dividing into 5 waves as labelled on the chart here. The termination at 11704 might be labelled as larger degree Wave (1).
Furthermore, subsequent rally between 1.1704 and 1.2266 had unfolded into 3 waves, labelled as a-b-c on the chart. The termination around 1.2266 could be marked as Wave (2) of a potential impulse drop ahead.
If the above structure holds well and unfolds accordingly, EURUSD could reach much below 1.1300 levels. At the moment, larger degree Wave (3) might be unfolding towards at least 1.1300 levels. Please note that probability remains for a bullish bounce around 1.1300 mark, since it is the fibonacci 0.618 retracement of previous rally between 1.0636 and 1.2350 respectively.
Most traders might be willing to hold short positions and also sell more on rallies, with potential downside target below 1.1300 levels at least.
Finacademy Technical Team
USDJPY could be progressing into a counter trend rally toward 114.30-50 zone in the next few trading sessions.
Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.
The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.