FX.co ★ Short-term technical analysis of EURUSD for July 30, 2020

The RSI in the 4 hour chart of EURUSD is showing some warning signs. Usually after a bearish divergence the price pulls back. As we explained in previous posts, 1.18 is a very important resistance area and we expect a pull back from current levels.

The new higher highs in EURUSD were not confirmed by the RSI. This is a typical bearish divergence signal. This is a warning. Not a reversal signal. Confirmation of at least a short-term top will come if support and recent low at 1.1730 fails to hold. The chances of a pull back are high at current levels because as we explained in previous analysis, at the 1.18 we find the 61.8% Fibonacci retracement of the 1.2510-1.0650 decline. Combining these two factors make me expect a pull back at least towards 1.16-1.17.