EURUSD is trading at 1.2235. Price briefly broke above short-term resistance and moved back below it. Price made a new short-term higher high but the RSI did not follow. The RSI made a lower high. This is another bearish divergence.
Blue lines- bullish channel
Red rectangle - resistance
Blue rectangle - support
EURUSD remains inside the bullish channel. Technically trend remains bullish. The bearish divergence from the RSI is just a warning that a pull back is imminent. Price could pull back towards the lower channel boundary and blue support area of 1.2160-1.2180. Breaking below it will imply that a bigger correction is coming. At current levels I prefer to be neutral if not bearish as I believe the upside potential in EURUSD is very limited. Failure to stay above 1.2215 would be the first sign of weakness and first sign of a reversal.
