Technical outlook:
EUR/USD dropped sharply on Friday, falling in line with our expectations, and carved a higher low at 1.1013 before reversing. We expected this drop to materialize for the last few trading sessions before EUR could resume its rally towards higher levels (1.1190, 1.1500). It is also highly probable that a potential low is already in place around 1.0990 levels, and prices should stay above that, going forward. At this point in writing, EUR/USD is trading at around 1.1030 levels and is looking to produce a bullish reversal. With the bullish structure still firmly intact, the current drop should be seen as an opportunity to go long and also add further long positions. Risk remains at 1.0879 since the bullish structure would be considered as void only if prices break below that support. The current drop has found support at the fibonacci 0.786 retracement of the recent upswing between 1.0990 and 1.1097 levels respectively. Immediate resistance on the 4H chart is seen at 1.1087 levels and a break above that would confirm that bulls are back and here to stay.
Trading plan:
Remain long against 1.0879, add fresh long positions, target 1.1190, 1.1500
Good luck!
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