EURUSD could start a strong bounce the week starting August 23rd.

EURUSD is in a bearish trend making lower lows and lower highs. There is no reversal signal yet. However the chances of a strong bounce have increased as price is making new lows and the RSI does not follow. This is a sign that the down trend is weakening. Traders need to be cautious and ready for a reversal. This does not mean we buy as price falls.

Red lines- bullish divergence

Green line - major support

EURUSD is expected to make a bounce at least towards 1.175-1.18 area. The bullish divergence in the 4 hour chart justifies such a price action at the start of this week. The bullish divergence is evident also in the Daily chart. This should not be ignored.

My expectations are to see price bounce and back test the broken neckline support from below. Currently the green neckline is at 1.1770. If EURUSD breaks above 1.1805 then we should expect more upside towards 1.19. Until then, trend remains bearish, but bears should be cautious and not greedy.