FX.co ★ Trading plan for EURUSD on May 17, 2022

Technical outlook:

EURUSD raised through the 1.0450-50 zone on Tuesday, inching towards its initial resistance seen around the 1.0640-50 mark. The single currency pair is seen to be trading at around 1.0440 at this point in writing. It is expected to push further higher from here. Bulls are looking poised to hold prices above the 1.0348 lows going forward.

EURUSD is still not out of woods on the downside and needs to break above the 1.0640-50 initial resistance at least to confirm a major bottom in place. Until that happens, the probability remains for yet another low below the 1.0348 mark going forward. Please note that the potential remains for a push through the 1.1200 and 1.1500 resistance levels in the next few trading sessions.

EURUSD has been showing bullish divergence on the daily RSI since the last swing low at 1.0800 as seen here. The latest drop through 1.0348 has produced a strong divergence, which indicates a potential trend reversal. The high probability remains for bulls to remain in control and prices to hold above 1.0348. Watch out for a break of 1.0640-50 in the next few trading sessions.

Trading plan:

Potential rally through 1.0650 against 1.0300

Good luck!