EURUSD is trading below 1.07. Weekly trend remains bearish as price continues to trade inside the downward sloping channel. Two weeks ago we warned that a break below the upward sloping trend line coming from the 2016 lows, would be a new bearish sign.
Blue line- weekly support trend line
The blue line support was broken at 1.0850. That is the point of our last bearish signal. With weekly RSI at oversold levels, the downward move in EURUSD could very well be in a capitulation phase. There is no sign of a reversal or a low. Going against the trend is not advised. Breaking below 2020 lows is not a good sign for the longer-term trend for EURUSD, however bears need to be cautious as this trend could end soon. I have been calling for increased possibility of a reversal since 1.08 and a limited downside potential. This remains the case. Markets do not trend in straight lines. Eventually a strong bounce will come as we are oversold on a weekly basis.