Technical outlook:

EURUSD dropped to fresh lows at 1.2111 yesterday, before finding support again and managed to pullback sharply towards 1.2175 levels in the next few hours. The single currency pair is seen to be trading around 1.2133 levels at this point in writing and is expected to push higher towards 1.2260/70 levels, going forward.

Immediate support is seen around 1.2080, while resistance is fixed at 1.2349 levels respectively. On the short term wave structure, EURUSD might have completed its initial drop between 1.2349 and 1.21111 levels respectively. Bulls might be preparing for a corrective rally towards 1.2270 levels before reversing lower again. Also note that fibonacci 0.618 retracement of the drop between 1.2349 and 1.2111 is seen towards 1.2265/67.

Hence probability remains high for a bearish reaction, if prices manage to reach there. Even the 1.2300 zone is a strong resistance for bears to resume lower again. Looking at the larger wave structure, EURUSD might be setting up to retrace the entire rally between 1.0636 and 1.2349 levels and drag lower towards 1.2100/50 levels respectively.

Trading plan:

Remain short, add more towards 1.2260/70, stop @ 1.2450, target is 1.1200/50

Good luck!