Technical outlook:
EUR/USD is testing a three-month resistance of the trend line as it is trading around 1.0630. The single currency pair might face resistance here and turn lower toward 1.0500 before resuming its rally. Please note that a bearish reversal from here remains a high probability and a break below 1.0580 will confirm the same. The bears remain inclined to come back in control at least in the near term.
EUR/USD has just taken out initial resistance at 1.0620 as seen on the 4H chart here. Ideally, a pullback should occur before prices move higher through the 1.0700-1.0800 area. Further note that the RSI on the 1-hour chart is producing a bearish divergence (not shown here), which is again a potential indicator for a turn lower ahead.
Only a clear break above the trend line resistance will confirm that prices are headed further north towards the 1.0780-1.0800 area directly from current levels. Alternatively, a turn lower from here and a break below 1.0500 levels would open the door towards the 1.0200-1.0250 area. The bulls will be well poised to come back in control thereafter.
Trading idea:
A potential bearish pullback could be underway towards 1.0500 at least.
Good luck!
