FX.co ★ Trading plan for EURUSD on May 18, 2023

Technical outlook:

EURUSD dropped toward the 1.0810 low on Wednesday, accelerating towards the projected near-term targets around 1.0700 and 1.0500. The single currency pair is seen to be trading close to 1.0935 at this point in writing and could pull back up to the 1.0940-50 zone before reversing lower again. A break below 1.0800 from here will drag towards 1.0750 at least.

EURUSD is underway to carve a larger-degree corrective drop towards 1.0500 and potentially the 1.0100-50 zone. The previous rally between 0.9535 and 1.1095 is being retraced and it could take several weeks for the structure to complete. Also, note that the Fibonacci 0.618 is passing through the 1.0100-50 area, which offers a strong potential for a reversal.

EURUSD has taken out initial support at 1.0830 (on lower timeframes), which could trigger a pullback in the near term. Any pullback towards 1.0950 should be taken as yet another opportunity to initiate further short positions. Ideally, prices should stay below the 1.1095 high and continue lower to 1.0500 in the medium term.

Trading idea:

Potential bearish continuation against 1.1200

Good luck!