The EUR/USD pair has dropped as discussed and expected earlier. Another probable scenario is discussed below as an alternate count. The rally from 1.1550 levels could be considered as wave 1 and hence a 3 wave corrective drop could be expected at least towards 1.1700 levels before turning higher again. Hence the trade setups should be taken as it unfolds, rather than holding it for long on the downside. Shorts were taken from 1.1950/60 levels earlier and one can consider short profits at current levels or around 1.1800 levels. Then again look to go short on intraday pullback rallies. Also, note that the Fibonacci 0.618 support of the entire rally between 1.1550 and 1.1960 is passing through 1.1700 levels as well. Trading strategies should be kept for short term 100-200 pips for now.
Trading plan:
Please exit short around current levels or around 1.1800. Then please wait for further plans.
US Dollar Index chart setups:
Trade setups:
The US dollar index has hit its first interim resistance at 93.20/30 levels now, maybe one more push higher before it retraces lower again. We are sticking to our wave count for a bullish rally to continue for now but a bit cautiously. The index is expected to stay above 92.50 levels going forward. We had suggested longs from around 92.60 levels earlier and one can look to book short-term profits on that now. Please wait for a corrective drop towards 92.90 levels to initiate long positions again with risk around 91.00 levels. The bullish count, if holds to be true, the next upside target is around 94.20/30 levels if not higher. We shall remain a bit cautious towards 94.50 levels and take a stand from there. Resistance is at 94.20 and support is at 92.50 levels for now.
Trading plan:
Please look to book profits now and remain flat.
Fundamental outlook:
Please watch out for USD GDP figures coming out at 0830 AM EST.
Good luck!
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