Technical outlook:
The EUR/USD pair pushed higher through 1.1840 levels yesterday right after the FOMC, as it was expected. The pair seems to be trading very close to resistance at 1.1850/60 levels. It has either terminated into wave 2 within wave (3) or is expected to terminate at 1.1860 levels today. Looking at the wave structure, the rally has unfolded into 3 waves and hence corrective until now. It is safe to assume higher probability towards a wave 3 pushing prices lower into 1.1550 levels. Please also note that since the 3rd of 3rd wave should be underway, expect prices to drop very fast from current levels. Aggressive traders who took long positions yesterday should exit and look to sell at these levels. Resistance is strong at 1.1960 levels and EUR/USD should remain bearish until prices remain below that. The pair is beginning to show signs of a much deeper correction.
Trading plan:
Please take profits from long positions yesterday. Sell now and around 1.1850/60 levels, stop above 1.1960 levels, target below 1.1550 at least.
US Dollar Index chart setups:
Technical outlook:
The US Dollar Index dropped lower almost exactly to 94.30/40 levels as expected and discussed yesterday, right after the FOMC. The wave structure is also indicative of a potential impulse rally ahead and the index seems to be already into its 3rd wave. Please note that a bottom is already formed at 94.30 or should form around 94.20 levels before the underlying rallies through new highs above 95.00 levels. Support is strong around 92.50 levels and the index should remain in control of bulls till prices stay above that. Also notice that the index is finding support right at the past resistance turned support region, not highlighted here though. Aggressive traders who went short yesterday should consider taking profits now and prepare to go long. The index seems to have quite enough room left on the north side.
Trading plan:
Please take profits and exit short positions now. Buy fresh stop below 92.50 and target 95.00 plus.
Fundamental outlook:
Watch out for ECB rate decision around 07:5 AM EST followed by US Retail Sales later today.
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com