The EUR/USD broke the support trend line (dotted green) and continued within the downtrend channel. Price is now testing the key 1.20 round level which is a new bounce or break spot for the currency pair. The currency pair however has reached the 161.8% Fibonacci target which is making it more likely that the current bearish momentum is indeed a wave 3 (blue), which would indicate that more downside is possible and likely.
The EUR/USD is currently building a wave 4 (brown) correction and price could respect the Fib levels and make a bearish bounce and continuation towards the Fib targets of wave 5 (orange). A break above the 61.8% Fib invalidates the current wave 4.
