EURUSD is trading around 1.2144. Price is moving lower as expected. As we noted several times before, despite the new higher highs in price, the RSI was not following and that was a warning that we did not ignore. The bearish divergence by the RSI warned us about an imminent reversal. When price was trading right below the upper channel boundary we said we prefer to be neutral if not bearish.
Blue lines- bullish channel
Blue rectangle -support
Red rectangle - resistance
EURUSD has now broken below both the blue support area and out of the bullish channel. Price has started making lower lows and lower highs. Most probably the entire rise from 1.17 is complete and we will at least see a retracement of this rise. It is important for the short-term trend to see if price today closes above or below 1.2150. The most probable scenario is for price to continue lower over the next week. First pull back target is at 1.2050.
