EUR/USD Falls Below 1.12 in Downward Channel
EUR/USD has been falling in a descending channel since falling from the high of 1.1615. The pair broke below the key 1.12 level earlier this week. There was a strong bounce from 1.1128 but prices found resistance at 1.12. It is also near the 38.2% Fibonacci retracement level of the upleg from 1.0520 to 1.1615. This level lies at 1.1196.
RSI is still in bearish territory below 50 and a significant shift in upside momentum would be needed to propel prices to break above 1.12 to rise towards this week’s high of 1.1243 and then target the 1.13 round figure resistance. If the pair maintains the surge beyond 1.1300 then the 23.6% Fibonacci level of 1.1356 will be targeted before advancing towards the 1.1615 high.
Alternatively, if the market remains below 1.1200, it would appear that the recent bounce was just a correction of the downtrend that started from 1.1615. Prices would resume the downtrend to fall towards 1.1067, the 50% Fibonacci level. Next support comes in at 1.0937, the 61.8% Fibonacci level.