FX.co ★ Trading plan for EURUSD on February 06, 2023

Technical outlook:

EURUSD finally reversed sharply from the 1.1025 high, the supposed resistance zone, on Friday. The single currency pair dragged through fresh lows at 1.0780 on Monday and is seen to be trading close to 1.0790 at the time of writing. The much-awaited retracement might be on its way lower towards 1.0480 and 1.0120 levels in the next several trading sessions.

EURUSD is looking set to produce a larger-degree decline and retrace the earlier rally between 0.9535 and 1.1025 levels. Intraday rallies are possible towards 1.0920 but the price should remain well capped below 1.1025. The bears might be poised to initially target the levels below the 1.0481 initial support before pulling back partially.

EURUSD's wave structure is indicative of a three-wave corrective drop towards the 1.0100-20 zone. Also, note that the Fibonacci 0.618 retracement of the above rally is passing through 1.0100-20. Hence, a high probability remains for a bullish turn if prices reach there. Only a push through 1.1020 will nullify the above bullish scenario.

Trading idea:

Potential bearish continuation against .1.1025

Good luck!