Technical outlook:
Yesterday, the EUR/USD pair formed a bottom close to the 1.1185 levels before pulling back sharply higher. We expected a bounce in this area. Taking into account immediate resistance at the 1.1212 levels, we would like to see the price breakout above the 1.1248 levels, marked here with an arrow. We have presented a probable lower degree wave count here, which indicated that a 5 wave drop from the 1.1448 levels might have completed at the 1.1182 levels yesterday. The entire drop can be labelled as (1) that of a higher degree and that wave (2) could be underway towards the 1.1340/50 area as discussed yesterday. An alternate could be that the wave v of a lower degree is still developing. In that case, the prices would stay below the 1.1248 levels and continue drifting lower towards the 1.0900 levels. Please note that a breakout above 1.1248 would confirm that a meaningful bottom have formed.
Trading plan:
Aggressive traders, remain long with a stop loss order below 1.1175. Conservative traders, wait for a breakout above the 1.1248 levels.
Good luck!
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