Red lines- bearish channel
Yellow rectangle- expected bottom area
EURUSD is bouncing for a second straight day. Price has made a low inside our yellow rectangle target area at 1.0488. Today price is bouncing towards 1.0620. Technically trend remains bearish as price continues making lower lows and lower highs inside the red downward sloping channel. In a previous analysis we mentioned that we expect to see at least a short-term bottom inside the yellow rectangle. A bounce off that area was expected. So far EURUSD is following our expected plan. A test of the upper channel boundary is very possible. However with no bullish divergence in the chart, I believe this upward bounce is only a small pause to the major down trend. This scenario will be challenged if price breaks out and above the bearish channel.