FX.co ★ EURUSD back tests broken bullish channel

EURUSD last week broken out of the bullish channel and reached as low as 1.2130 area. However price snapped back up very fast and is now testing the broken channel from below. Price is now back testing the channel resistance, previously support. A rejection at current levels of 1.22 will be a bearish sign.

Blue lines- bullish channel

EURUSD is expected to pull back towards 1.2050 where we find the 38% FIbonacci retracement of the entire upward move from 1.17. Support is found at last week's low at 1.2130. Bears need to break below this level in order to resume the downward move towards 1.2050. Resistance is at 1.22-1.2210 where we find the lower channel boundary. Pushing above 1.2210 will increase chances of seeing a new higher high towards 1.23. It is important to see if the RSI provides another bearish divergence in case price makes a higher high. I continue to believe this price area around 1.22-1.23 is an area to be neutral if not bearish.