Technical outlook:

EURUSD climbed through the 1.0540-45 highs intraday on Friday, almost hitting the projected targets as discussed earlier. The single currency pair is seen to be trading close to 1.0540 at this point in writing as the bulls prepare to take on the 1.0550-1.0600 targets. A potential top could be carved during the New York session later before the bears come back in control.

EURUSD is facing strong resistance around 1.0550-1.0600 as projected on the daily chart here. The larger-degree counter-trend rally, which had begun from 0.9535 earlier, is also expected to terminate between 1.0550 and 1.0600 levels. Furthermore, the Fibonacci 0.382 retracement of the drop between 1.2266 and 0.9535 is also passing close to the 1.0600 mark.

A high probability remains for a turn lower if prices reach the 1.0550-1.0600 range. Also, note that RSI on several timeframes is beginning to show bearish divergence (not shown here), which encourages a potential reversal. A break below 1.0290 will confirm that a larger-degree downtrend has resumed and the bears are back in control.

Trading idea:

Potential drop against 1.0700

Good luck!