Technical Analysis and Trading Idea for EUR/USD: Potential Rally and Support Levels
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Technical outlook:
EUR/USD has carved a fresh low at 1.0845 last week remaining just shy of initial support around 1.0830. The single currency pair has pulled back since then and is seen to be trading above 1.0880 at this point in writing. The bulls are likely to push prices towards the 1.1000-50 area before the next leg resumes lower.
EUR/USD has broken its one-year trend line support as seen on the daily chart here. The probability remains for a push through the backside of the support-turned-resistance zone, which is seen around the 1.1000-50 zone before turning lower towards the 1.0500 Fibonacci target. Also, note that the entire rally between 0.9535 and 1.1275 could be retraced with prices reaching 1.0200.
EUR/USD seems to have also carved a lower-degree downswing between 1.1275 and 1.0845 which could be retraced in the next few trading sessions. The Fibonacci 0.618 retracement is seen passing through 1.1150 which could be tested before the next leg resumes lower again. A push through 1.0920 will confirm that a corrective rally is underway.
Trading idea:
A potential rally towards 1.1150 in the near term remains possible.
