Technical outlook:

The EUR/USD H4 chart might be indicating a short-term pullback rally in the counter as expected and discussed on Friday. The pair has produced a morning star candlestick pattern on this time frame and has exceeded 1.2130 levels in terms of price action, breaking above the first interim resistance at 1.2130 levels. We are expecting a small corrective dip towards 1.2080 now, carving out a potential higher low, before extending this corrective rally through 1.2190/1.2200 levels. Aggressive short-term traders who went long on Friday as suggested can hold positions accordingly, while conservative traders should wait for another higher price to enter short again. Looking into the wave count, the pair seems to have completed waves 1,2 and 3 of the same degree now, and that wave 4 is in progression now. A safe strategy is to watch out for higher prices to sell again.

Trading plan:

Aggressive traders remain long with stop below Friday lows.

Fundamental outlook:

Watch out for German Consumer Price Index and US PCE Core to be out today between 08:00 AM to 08:30 AM EST.

Good luck!