FX.co ★ Bulls remain in control of EURUSD short-tem trend

EURUSD is trading around 1.21 while it continues to make higher highs and higher lows. However the RSI is not making new higher highs providing us with an important warning signal.

Purple line -bearish RSI divergence

Red line - resistance trend line

EURUSD is still inside the bullish channel. Support is at 1.2050 while resistance is at 1.2120 area. If price breaks below 1.2050 we will get a bearish signal. Combined with the bearish RSI divergence this would imply that price will be correcting the rise from 1.17, most probably towards 1.1850-1.19. I believe upside potential at this area is limited and bulls need to be very cautious.