Technical outlook:

EURUSD had retraced over a 100 pips since dropping to 1.2150 early this week. This might be the first corrective wave of the entire corrective rally towards 1.2250/1.2300 levels. The single currency pair is seen to be trading around 1.2118 levels at this point in writing and is expected to drop further towards 1.2095/1.2100 levels in the immediate short term.

Immediate resistance is fixed at 1.2350 while support is seen around 1.2150 levels respectively. As the above counter trend progresses further towards 1.2250/60 zone, we might see a bearish reaction since fibonacci 0.618 retracement of recent drop is seen there (not shown on the daily chart). The currency pair might then resume lower towards 1.1600 mark over the next few weeks.

On the flip side, bulls might want to attempt a test of 1.2350 resistance before bears might be back in control. The larger wave structure remains constructive for bears, as they prepare for a large corrective drop towards 1.1200 levels going further. It could be safe to hold short positions and also add further on rallies through 1.2250/1.2300 levels respectively.

Trading plan:

Remain short, add further @ 1.2250/1.2300, stop @ 1.2460, target remains 1.1600.

Good luck!