EURUSD is trading around 1.22 after making a push above 1.2230 and close to recent highs. Price is making higher highs and higher lows, but the RSI as we mentioned in previous posts is showing warning signals with a bearish divergence.
Red line - bearish divergence
Price is vulnerable to a bigger pull back. Trend however remains bullish as long as price is inside the bullish channel and most importantly above the recent key short-term low at 1.2050. EURUSD has been in a bullish trend since the low of 1.17 and has reached very close to the 2021 highs. A short-term pull back towards 1.2130-1.2150 is highly likely, so short-term bulls will need to be a little bit patient. Resistance is at 1.2230-1.2240 area. Breaking above this resistance can not be ruled out for the short-term, but traders will need to keep a close eye also on the RSI. Another lower high by the RSI will increase chances of a reversal.