Technical outlook:

The EUR/USD pair still remains under the probable count of a leading diagonal wave (1) and probable wave (2) at least for now as labelled here. The most probable wave direction is looking towards the south side at least until 1.1670/80 levels. As discussed yesterday, let us please look into an alternative wave count. If EUR/USD turns bullish from around 1.1670/80 levels, probability remains that of a much higher corrective rally that could push prices through 1.1900/50 levels before terminating wave (2). To keep things simple, and looking into the subset scenario we can expect a drop from current levels towards 1.1680 at least and then we would again review conditions there. Resistance remains around the 1.1875/1.1900 levels for now, while price support should be strong around 1.1670/80 levels respectively.

Trading plan:

Aggressive traders would want to go short again, risk above 1.1900 levels and target 1.1670/80.

US Dollar Index chart setups:

Technical outlook:

The US Dollar might be producing an up gartley structure and might produce a deeper correction after a short rally towards 94.50/60 levels. We are still optimistic about the probability of an impulse wave (1) and wave (2) having complete or wave (2) may produce a deeper correction towards 92.60/80 levels. Sticking to an A-B-C gartley scenario, the US Dollar Index looks to be set for a rally from current levels and then reverse lower again. As an alternate though, the index might also continue to rally towards fresh highs at 95.30/50 levels before producing a meaningful correction. In both the above scenarios, the common point is a rally from here towards at least 94.50/60 levels. Immediate and strong price support is seen around the 92.80 levels, while resistance should be strong towards 94.50 levels respectively.

Trading plan:

Aggressive traders might want to go long again with risk below 93.40 and targeting 94.50/60.

Fundamental outlook:

Watch out for Mr Draghi's speech in a few minutes, followed by CAD Consumer price index around 0830 AM EST

Good luck!