FX.co ★ Short-term analysis on EURUSD for May 17, 2021.

EURUSD has started the week on a slight positive note just above Friday's close. The volatility in the market is low but we expect it to rise during the week. EURUSD has already provided us with a bearish warning by the RSI. The bearish divergence in the Daily chart is not to be taken lightly.

EURUSD has the potential to provide a new higher high towards 1.2205. Traders will need to keep a close eye on the RSI. If price makes new highs and the RSI not, instead if the RSI hits the red line resistance and turns back down, then we will have another bearish divergence. This would be a sign of weakness and it would increase chances of a major reversal and pull back. Support is at 1.2050. Breaking below this level would imply more downside to be expected.