Technical outlook:

The EUR/USD pair is playing out according to suggested wave counts discussed earlier. Yesterday, as well it has made lows at 1.1715 levels before pulling back sharply. Today, it is quite possible that it could test yesterdays lows by a few points around 1.1700/10 levels before turning bullish again. Please note that we have presented the most probable wave counts here. The expected rally towards 1.1860 levels could be just a retracement so please do not go over board thinking of another high as of yet. As long as EUR/USD stays below 1.1950 levels, it is expected to remain under control of bears. We should be prepared to go long today, to take advantage of the counter trend rally towards 1.1860 levels.

Trading plan:

Please exit shorts taken earlier and turn long around 1.1700/10 risk at 1.1660 target 1.1860.

US Dollar Index chart setups:

Technical outlook:

The US Dollar Index had hit the proposed resistance levels yesterday at 94.20 levels before retracing lower and we are sure you might have take profits there. Please note that it is quite possible 94.20 is a meaningful top in place already and that the index is now expected to drop lower in a corrective manner towards 93.30 levels before turning long again. We have presented the most probable wave count here which also states that the index should be poised to drop lower as wave 2 within the 3rd wave. It would be too early to conclude that the US Dollar Index has completed its bullish run and it is heading south until prices stay above 92.50 levels going forward. Aggressive traders should be looking to go short at these levels to take advantage of the counter trend opportunity.

Trading plan:

Please exit longs taken earlier for now. Remain short from here with risk above 94.65 with a target at 93.30 levels.

Fundamental outlook:

Please watch out for the FOMC rate decision to be out today at 02:00 PM EST.

Good luck!