EURUSD 4H chart presented here clearly indicates a potential lower top might be in place around 1.2240 last week. Bears are back in control since then and managed to drag prices towards 1.2050/60 levels. The currency trades just below 1.2100 as of now and is expected to push through 1.2150 at least, before reversing lower again.
EURUSD might have resumed lower again and is expected to carve lower lows and lower highs towards 1.1600 levels. As labeled on the chart here, the currency had earlier carved Wave 1 through 1.2050 marks. Thereafter, a complex corrective structure A-B-C might have unfolded towards 1.2240.
A bearish reversal here could drag prices lower towards 1.1700 and 1.1600 levels respectively. The wave structure could also be seen as a 3-3-5 (A-B-C) from 1.2350 through 1.1600 levels, over the next several weeks.
Also, note that EURUSD had retraced up to Fibonacci 0.618 of the drop between 1.2350 and 1.1950 and managed to touch 1.2240 marks. Bears seemed to be prepared to take control back from there as prices reversed sharply lower towards 1.2050 levels.
The recent boundary that might be worked upon is between 1.2240 and 1.2050 levels respectively. A pullback or counter-trend rally remains possible through 1.2175 levels, before resuming lower again. Also, note that the earlier line of resistance is offering space to print lows below 1.1950 levels.
EURUSD remains bearish for now and 1.2350 remains the line in the sand for the above to hold. We remain optimistic on a potential drop towards 1.1600 going forward. Also, note that the potential remains for a drop below 1.1200 as well.
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.