Technical outlook:

The EUR/USD pair has produced a counter-trend rally as it was expected and discussed last week. At the moment, the single currency pair is seen to be trading at 1.1118/20 levels after printing an intraday high at 1.1133 levels. Please note that it has tested the immediate resistance trend line and is expected to produce a bearish reaction. Also note that immediate price resistance is at 1.1162, followed by 1.1188 levels. Looking into the wave structure, the EUR/USD pair seems to be progressing into wave 3, after having completed the termination of waves 1 and 2 as depicted here on the 4H chart. Furthermore, also note that the Fibonacci 0.382 resistance levels of the recent drop between 1.1280 through 1.1026 levels have been tested and prices are dropping lower as we continue writing this article. The current price is seen to be at 1.1114 levels and producing a shooting star candlestick pattern on the above chart. It is an ideal strategy to initiate short positions with risk above 1.1280 levels. On the flip side, a break above 1.1162 levels would still find resistance close to 1.1200 levels.

Trading plan:

Remain short, stop at 1.1280, target is open.

Good luck!