EURUSD is moving higher after our call for a highly probable trend reversal when price was trading below 1.18. The bullish RSI divergence warning was the first signal that made us expect this reversal. Price also approached the key support trend line coming from 1.16 and is also the neckline of the Head and shoulders pattern we talked before.
As long as price is above this red neckline support we remain bullish. Breaking below the neckline support will activate the head and shoulders pattern and give us a target of 1.12-1.10. For the head and shoulders pattern to get canceled we need to see price break above the right hand shoulder highs. It is still too early to talk about breaking above 1.2265. For now we focus on the short-term bounce that is underway and expected as per our analysis. EURUSD resistance is found at 1.1970 and next at 1.2080. In order for the medium-term trend to change to bullish, bulls have a lot of work to do.
