Blue lines- bullish channel
Red lines- bearish RSI divergence
EURUSD is trading below 1.10 and is breaking below the recent lows of the past 4 trading sessions. The bearish RSI divergence has warned bulls of an imminent reversal. Price remains inside the medium-term bullish channel, but as we explained in previous posts, current market conditions justify a deep pull back at least towards the lower channel boundary. Support by the channel boundary is at 1.0785 and at the same level we find the 50% Fibonacci retracement level of the latest rise from 1.0517 lows. Price continues making lower highs over the last few trading sessions increasing the chances of deeper decline. Resistance is at 1.10 and as long as price is below this level bears remain in control of the near term trend.
