Technical outlook:

EURUSD dropped below 1.0500 during the Asian session on Tuesday as the bears remain poised to come back in control. The single currency pair is seen to be trading close to 1.0480 at this point in writing. The bears aim to hit below 1.0400 in the near term. A high probability remains for a bearish reversal against the 1.0595 interim resistance.

EURUSD might be carving a potential top soon within the range of 1.0590-1.0600 as it is producing a shooting star candlestick pattern on the daily chart. A break below the 1.0424 immediate short-term support will potentially confirm that the bears are back in control. If the above holds well, the instrument is expected to drag below 0.9740 and 0.9535 going forward.

EURUSD wave structure is indicating that the larger-degree counter-trend rally, which began from 0.9535, is either complete at 1.0594 or is close to termination. If correct, the next major direction is expected to be lower towards 0.9400 and further. Only a consistent break above 1.0595 will enable the bulls to test the 1.0750 resistance and void the bearish outlook.

Trading idea:

Potential bearish reversal against 1.0700

Good luck!