Technical Outlook:

EURUSD bulls continue to remain in control as they are poised to push towards 1.1500 handle over the next few weeks. After a short pause over the last week, EURUSD is expected to bottom around 1.1180/1.1200 levels. Thereafter, the rally should resume towards 1.1500 levels.

Looking at the short term wave counts since 1.0775 lows, EURUSD seems to have carved lower degree waves I, ii and ii around 1.1000, 1.0870 and 1.1383 respectively (not labelled today). Since then, it has been carving an expended flat as wave iv and is expected to terminate close to fibonacci 0.618 of wave iii, around 1.1800/1.1200 respectively.

A wave v rally is expected to resume later, towards 1.1500, Wave 3 on the chart. The larger degree wave counts could be termed as follows. EURUSD had rallied between 1.0636 and 1.1150 as an impulse, Wave 1 on the chart here. Wave 2 potential triangle terminated around 1.0775 levels. Since then, a Wave 3 rally seems to be underway towards 1.1500.

Ideally, prices should remain above the 1.1000 handle to keep the above bullish structure intact. Also if Wave 3 has to unfold as an impulse, prices should stay above 1.1000 as a rule. If the above counts hold well, we should see a bullish reversal from 1.1180/1.1200 levels and EURUSD should proceed towards 1.1500, going forward.

EURUSD still remains a potential candidate to be bought on dips towards 1.1200 handle.


Trading Strategy:

Long against 1.0630, targeting 1.1500


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