Technical Market Overview:

The EUR/USD pair has made a Bearish Engulfing candlestick pattern at the end of the yesterday short-squeeze. The target level at 1.1280 has not been hit, but the top was made at the level of 1.1254, so pretty close. After the top was made, the price has tested the technical support area located between the levels of 1.1206 - 1.1181 and bounced slightly. This move up is still a correction withing the larget downtrend, because the larger timeframe trend remains down and there are no signs of any trend reversal yet. The market conditions are now overbought and despite the positive momentum, the correction might start any time soon.

Weekly Pivot Points:

WR3 - 1.1304

WR2 - 1.1233

WR1 - 1.1170

Weekly Pivot - 1.1096

WS1 - 1.1037

WS2 - 1.0957

WS3 - 1.0876

Trading Recommendations:

The best strategy for the current market conditions is to trade with the larger timeframe trend, which is still down. The Ending Diagonal pattern has not been finished yet and the bears are in full control of the market. The longer-term target is seen at the level of 1.0814, from where the traders can expect a larger rebound.