Red lines- medium-term bearish channe
Blue lines- Fibonacci retracements
EURUSD is making new short-term higher highs. Price has started an upward reversal from 0.95. Price has so far retraced more than 50% of the decline from 1.0198 and is approaching the 61.8% level. This Fibonacci retracement is our next target since price broke above the 38% retracement. At this retracement level we usually see trend reversals or counter trend moves end. Price remains inside the medium-term bearish channel. If bulls manage to push price above the 61.8% retracement level then the chances for a move towards the upper channel boundary increase. The RSI is approaching overbought levels and price the key resistance at the 61.8% Fibonacci retracement. Bulls need to be cautious. A reversal and resumption of the downtrend are justified and a highly probable scenario.
