EUR/USD has broken below the lower boundary of the triangle pattern and bounced strongly back inside the triangle yesterday. This could very well be a fake break down to enable traders to set stops. For this scenario to be confirmed we will need to see the price breaking above 1.1415 at least.
Blue lines -triangle pattern
Purple line - short-term resistance
Green line - RSI support trend line
With a new lower low in EUR/USD and the RSI holding above the green trend line support, we remain skeptic on the strength of this downward break out of the triangle pattern. The price has bounced back inside the pattern but below the purple resistance trend line at 1.1360. Bulls will need to break and hold above this trend line in order to hope for a full scale reversal and break out above the upper triangle boundary. A rejection at 1.1360 and a break below 1.1270 would open the way for a move towards 1.12 and lower. The medium-term trend remains bearish from 1.2550 and will change on a break above the red trend line resistance.
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