Time for a EURUSD Correction, eyeing the 23.6 Fibonacci
Following the completion of the bullish Pennant pattern, the EURUSD's upswing appears to have peaked just below the Resistance Area (in green). The significance of the latter stems from the fact that it outlines the previous swing high. This is what gives prominence to the expectations for a bearish correction.
The first major test for such a correction is encompassed by the 23.6 per cent Fibonacci retracement level at 1.19429. If the price manages to break down below it, then the next target would be the major support level at 1.19000. The deepest target is represented by the 1.18400 support.
As regards the underlying fundamentals currently in play, the market seems to have already priced in the U.S. inflation data from yesterday, which supports the expectations for the emergence of a bearish correction.
The first major test for such a correction is encompassed by the 23.6 per cent Fibonacci retracement level at 1.19429. If the price manages to break down below it, then the next target would be the major support level at 1.19000. The deepest target is represented by the 1.18400 support.
As regards the underlying fundamentals currently in play, the market seems to have already priced in the U.S. inflation data from yesterday, which supports the expectations for the emergence of a bearish correction.