Technical outlook:

The EUR/USD pair continues to probe a meaningful lower high before reversing lower again. The pair has inched higher a bit and printed a lower high at 1.1254 levels today before retracing lower. Please note that the rally from 1.1162 levels yesterday still looks to be corrective in nature, completing 3 waves a-b-c as labelled here. Looking at the entire wave count on the hourly chart, EUR/USD might have carved A and B waves of the corrective drop that began from 1.1263 levels earlier. If this wave count holds true, the pair should be looking to print lower lows and lower highs going forward. A break below 1.1230 levels and subsequent break below the interim support trend line further confirms our bearish outlook. The pair should be on its way to complete 3-3-5 A-B-C wave structure before finding support around 1.1000 levels. On the flip side though, a break of 1.1263 levels would delay matters further for a bearish decline.

Trading plan:

Remain short, stop above 1.1263 levels, targeting 1.1000 at least.

GBPUSD chart setups:

Technical outlook:

The GBP/USD hit above 1.2925 levels yesterday as expected and discussed. Please note that the pair hit the back side of the support turned resistance trend line at 1.2925 levels and reversed lower again. It is quite possible that GBP/USD has found a meaningful top around these levels. If so, prices should continue drifting lower gradually towards 1.2600 and 1.2350 levels respectively. On the other side, the pair can also push higher towards 1.2950 levels, hitting fibonacci 0.618 resistance and then dropping lower. In either case, GBP/USD should remain below 1.3047 levels if bears want to remain in control. Immediate resistance is seen at 1.3047 levels, while interim support is seen at 1.2775 levels respectively. Selling on rallies should be considered as a preferred trading strategy.

Trading plan:

Holding shorts from 1.2900/25 yesterday, stop above 1.3047, target 1.26 and 1.23 respectively.

Fundamental outlook:

Watch out for USD ISM Manufacturing numbers at 10:00 AM EST today.

Good luck!