FX.co ★ Trading plan for EUR/USD on January 26, 2022

Technical outlook:

EUR/USD might have carved a meaningful bottom around 1.1260 on Tuesday and now it looks ready to resume its rally. It is also possible that the pair prints one more low around 1.1250 before finding support. The single currency pair was trading close to the 1.1285 level at the time of writing and is expected to resume its rally soon.

Earlier, EUR/USD ralied between 1.1186 and 1.148, carving an upswing. Prices retraced to the Fibonacci 0.618 retracement level of the upper boundary as seen on the chart here. Ideally, a bullish reversal should be seen from around the current price. In this case, the price may go through the 1.1700 mark in the next few trading sessions.

The pair's larger wave structure is also bullish since prices bounced from just below the Fibonacci 0.618 retracement of the previous rally between 1.0636 and 1.2350. Bulls might be targeting 1.1700, which is the next in-line resistance as depicted on the daily chart. Watch out for bulls to be back in control soon.

Trading plan:

Potential rally through 1.1700 against 1.1150

Good luck!