FX.co ★ Trading plan for EURUSD for January 08, 2021

Technical outlook:

EURUSD has managed to accelerate its drop from 1.2349 and print an intraday low at 1.2213 today. The drop might be still incomplete and we might witness another low before the end of the day. The single currency pair is seen to be trading around 1.2245 levels at this point in writing and is expected to break below 1.2200 levels in the near term.

The drop from 1.2349 might be retraced thereafter, and EURUSD bears are expected to check the counter trend rally below 1.2349 swing highs. Immediate resistance is now seen towards 1.2249, while support is around 1.2200, followed by 1.2170 levels respectively. A break below 1.2170 would be considered to be constructive for bears and could mark the beginning of a much deeper drop.

Looking at the overall wave structure, EURUSD might have completed its rally that had begun from 1.0636 lows registered in March 2020 at 1.2249. High probability remains for a drop towards 1.1600 levels at least in the coming weeks; and potential remains towards 1.1200/1300 going forward.

Trading plan:

Remain short, stop above 1.2450, target @ 1.1600.

Good luck!