$EURUSD - Overbought ST but MT suggests buying dips. $DXY

EURUSD - Overbought conditions developing, short term corrective opportunity.

February’s monthly hammer and a completing corrective structure suggest we may now have seen an important medium-term low in EURUSD.
The weekly hammer-like/bullish harami reversal candle two weeks ago resulted in an impulsive rally that has taken us to resistance at the top of a major trend channel towards 1.12.
The sheer impulsiveness of the move and the severe US dollar weakness in recent days suggest despite a positive medium-term set-up, it is time for caution.
The intraday time frames show a completed five wave move higher and bearish divergence, although the divergence forming is minor to this point.

The favoured scenario is a corrective phase to occur next. I am looking for this to play out as a three-wave correction at a minimum, and for the sequence of lower intraday peaks and troughs to develop into a short-term downtrend. To that end, a break below 1.1143 would be the first sign of failure, but below Tuesday’s low at 1.1095 will be required for a deeper correction to be in play towards Friday’s low at 1.0950, which coincides with the 61.8% fib retracement of the recent major rally at 1.0940.
This decline should represent the buy zone for the next leg of EUR strength.
A failure to hold below 1.1212 will put the corrective phase on hold and a final burst higher.

Be patient, a momentum break below 1.1140 will offer a corrective trade and a confirmation of a high in place; else more work is required to confirm this short term high.