EUR/USD has reached all our minimum downside targets. Price is more oversold now (in RSI terms) than when it was trading below 1.13. This is a bullish sign. Bears should take short-term profits as the chances of a bounce towards 1.14 or higher are high.
Yellow rectangle - oversold RSI reading
Red line - major trend line resistance
Black lines - expected equal leg down
Purple line - expected bounce
EUR/USD has broken through the 61.8% Fibonacci retracement as expected and reached 1.1350-1.1360 which was our target. The RSI is at oversold territory and bears should be careful to protect their profits. There are high chances of at least a bounce towards 1.14 from current levels. Only a break below 1.13 would open the way for a move towards 1.11-1.10. Major resistance trend line is found at 1.1480. A break above it will open the way for a move towards 1.16. Short-term resistance is found at 1.1380-1.1395. A daily close above this area would open the way for a move towards 1.1430.
The material has been provided by InstaForex Company - www.instaforex.com