Technical outlook:

EUR/US dropped to 1.2108 lows before managing to pullback through the 1.2140 mark. It is quite possible that the second leg of its corrective rally might be complete and bulls could be back in control for the final push towards 1.2250 The single currency pair is seen to be trading around the 1.2126 levels at the moment of writing. It might be ready to rally towards the 1.2250/70 levels in the next few trading sessions.

Immediate support is now seen around 1.2050, while resistance is fixed near the 1.2350 levels respectively. Also note that the Fibonacci 0.618 retracement of the drop between 1.2350 and 1.2053 is seen between the 1.2250/70 levels respectively. A bearish reaction could be seen if prices manage to reach there (not highlighted on the chart, displayed here).

Furthermore, the overall rally between 1.0636 and 1.2350 might be complete. Hence high probability remains for a meaningful corrective drop that could push prices at least towards the 1.2200/1.2300 levels respectively. Watch out for the counter trend rally to accelerate towards the 1.2250/70 levels.

Trading plan:

Remain short, add more @ 1.2250/70, stop @ 1.2450, target is 1.1600.

Good luck!