EURUSD is in a bearish short-term trend after breaking out and below the bullish channel. EURUSD is now retracing the entire upward move from 1.0775 to 1.1422, First target is the 38% Fibonacci retracement at 1.1175.
Black line- bearish divergence
Since last week we warned about the bearish divergence signs. Also we warned that a break out of the channel would be a bearish sign if it was followed by a bounce and a rejection at the back test area. EURUSD did exactly this and continues to make lower lows and lower highs. The first target is at the 38% Fibonacci retracement. Breaking below this support level we should expect price to continue lower. Resistance is found at 1.1340 and as long as price is below that level we consider each bounce as a selling opportunity.
