EURUSD as expected has made a reversal today and has so far pulled back towards 1.2160. Short-term support is found around 1.2160 and price is now bouncing. Our view remains bearish as price is turning lower from 1.22-1.2250 area.
EURUSD is in the process of changing trend from bullish to bearish. We talked about the warning signals by the RSI and the bearish divergence. If price breaks below the red support trend line we will have another bearish signal, stronger this time. Resistance is at recent highs of 1.2253. Bulls need to break above this level in order to hope for a move towards 1.23. Given the bearish divergence signals, I believe it is very unlikely to continue higher. I expect soon price to break to new short-term lows. My short-term target is 1.2050.
