EURUSD has advanced considerably over the preceding week after the rebound on the 21-month low of 1.1175, challenging again its simple moving averages (SMAs) in the daily timeframe. The price surpassed the 23.6% Fibonacci retracement level of the downleg from 1.1570 to 1.1175, near 1.1325, but it continues to trade within a downward sloping channel.
Technically, the RSI indicator is confirming the recent upside movement as it is sloping slightly higher. In Stochastics, the %K and %D lines have posted a bullish crossover in the overbought zone. The latest action may signal the end of the bullish action and the start of a bearish correction.
If the price continues the upside movement, immediate resistance could come from the descending trend line, around 1.1350. A decisive break above the channel, could send prices towards the 1.1420 barrier, which overlaps with the 38.2% Fibonacci mark. Moreover, if the market pushes the pair even higher, the 50.0% Fibonacci around 1.1500 could also act as a significant hurdle.
On the other hand, if the price fails to jump above the downtrend line, it could hit the 1.1175 bottom again, where a possible penetration of this obstacle could drive the pair even lower, probably towards 1.1115 identified by the lows on June 2017. More downside pressure could open the door for the 1.0830 level, taken from the low on May 2017.
Concluding, EURUSD seems to be negative in the short and medium term, posting lower lows and lower highs.
