FX.co ★ EURUSD approaches our 1.19 target.

Since the reversal from 1.17, we have been expecting for EURUSD to make a strong bounce at least towards the 38% Fibonacci retracement of the entire decline. Price remains inside the bullish channel and as long as this is the case, we expect EURUSD to continue higher. The bullish RSI divergence initially warned bears of the weakening down trend.

Red lines - Bullish divergence

Black lines - bullish channel

Blue lines - Fibonacci retracement

EURUSD is still inside a bullish channel. Even a pull back towards 1.1830 is justified and will not cancel the short-term bullish trend. The RSI is approaching overbought levels in the four hour chart and this is another reason why a pull back is justified from current levels.