Technical Outlook:

The pair has reached the downside extensions at 105.50 levels have been met sooner than it was expected. A major past support at 105.59 has been broken through on Daily Charts (please refer to the chart below). The pair is very likely to begin a counter-trend rally today.  It is recommended to open long positions from here. Resistance levels are seen in points 108.50; the rallies are exppected to be capped by 109.00 levels.

Chart Setup and Trade Recommendations:

Looking at the chart, it is evident that the prices are stabilising at the 0.382 retracement of the rally between 97.00 and 110.50. Furthermore it has also served our downside expectations at 105.50. Bears are expected to go in for a break now, expect a rally to resume in the nearest future targetting 108.50 and 109.00 levels. It is possible that rally will be extended to 110.00 levels. The counter-rally has the potential to decline towards 102.00 levels in coming sessions, but in 3 waves. The first downside wave is expected to be completed. We need a relief counter-trend rally before we go short again.

Trade Recommendations:

Buy @ 105.60/80 levels, Stop @ 105.00/20, Target Open.

Best Regards,