Technical outlook:

The EUR/USD pair reversed lower sharply after testing the recent swing highs at 1.2444 levels yesterday. Please note that the overall bigger picture certainly remains intact with price swings set to remain inclined lower from here. Interim resistance is now seen at 1.2445 levels, yesterdays' high, while immediate support lies just below the 1.2300 mark. The wave counts labeled here suggest that waves 1 and 2 of a lower degree are complete and that wave 3 is underway, which should unfold into 5 waves itself. An alternate scenario could be that wave 2 is yet not complete and the corrective rally that began from 1.2154 levels may unfold into a more complex structure. In that case, we could see yet another push above 1.2445 levels for wave 2 to terminate before wave 3 could resume. Also note that the conventional Head and Shoulder pattern is also unfolding, and if it holds true, prices should remain below 1.2555 levels going forward.

Trading plan:

Please remain short and look to sell more on rallies. Risk remains above 1.2555 levels.

Fundamental outlook:

Watch out for CAD unemployment rate at 08:30 AM EST, also followed by USD Unemployment rate and NFP.

Good luck!