Technical outlook:

The story continues from where we left yesterday. With another low in place at 1.0838 levels today, most probably the first leg seems to be over. As labelled here, EUR/USD might have just completed its wave (1) at a higher degree and it should resume its counter trend rally into wave (2) as highlighted here. As an alternative though, today's lows could be wave 3 and wave 4 that should terminate into 1.0910 levels to continue drifting lower from there on. The fibonacci 0.618 resistance is also seen at 1.0950 levels which should provide formidable resistance going forward. A break above 1.0893 levels would confirm further acceleration into the counter trend rally. Resistance is strong at 1.1022 levels now, and support is seen at 1.0800 levels respectively.

Trading plan:

Short-term time frame traders can take profit in short positions taken earlier and look to sell again higher around 1.0950 levels. At the same time, long-term time frame traders may hold short positions and look to open more trades on counter trend rallies. An aggressive trade strategy would be to go long with stop below 1.0838 levels and reverse at higher levels.

GBPUSD chart setups:

Technical outlook:

The GBP/USD story continues to remain bearish from what was discussed yesterday. There is no change in the long-term outlook but one can expect intraday pullback rallies before it breaks below 1.2830 levels. Please note that with today's drop and subsequent break below 1.2830 levels, bears would confirm that they are in control, and GBP/USD should continue dropping lower. The wave count suggests that wave (4) at a larger degree is in place now, and GBP/USD should accelerate lower into wave (5), unfolding into 5 sub waves. The long-term downside targets remain at 1.2000 and lower. Looking at the short-term wave count, after breaking below 1.2830 levels, a pullback rally should unfold before reversing again. Immediate resistance is at 1.2988 and support is at 1.2830 levels respectively.

Trading plan:

Please remain short with a slightly larger time frame view, stop above 1.2990 levels, a target is open.

Fundamental outlook:

With no major fundamental events lined up for today, please do not expect huge volatility for the rest of the day.

Good luck!