FX.co ★ Trading plan for EURUSD on February 13, 2023

Technical outlook:

EURUSD dropped through the 1.0666 low on Friday before finding some bids. The single currency pair tested 1.0660 in the early hours on Monday before rallying through the 1.0685 highs intraday. It is seen to be now trading close to 1.0675 at this point in writing as the bulls prepare to come back in control. The downside potential remains but intraday rallies remain possible to 1.0800.

EURUSD might have completed its first wave of the larger-degree correction, which began from the 1.1025 high early this month. If the assumption is correct, prices could rally through 1.0800 and up to 1.0880 in the second wave before resuming its third wave lower to complete the pattern. The bears are inclined to drag the price lower towards 1.0500 and down to 1.0100 in the near term.

Alternatively, if the larger-degree trend has reversed from 1.1025, EURUSD will continue lower towards 0.9535. Either way, prices are expected to drop through 1.0100 in three waves at least. Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.1025 is passing through 1.0100. Hence, the potential remains for a bullish reversal from there.

Trading idea:

Potential bearish move against 1.1025

Good luck!