Despite flashing bearish signals, EUR/USD failed to halt at the weekly R1 on Tuesday. The Euro did remain near this level during the morning session, but was then pushed higher by a strong three-hour surge up to 1.16. As a result, the total gain for the day was 100 pips.
As apparent on the chart, the Euro has been reluctant to move past the given psychological level. This means that the expected decline is likely to happen today. Technical indicators are starting to edge lower which is also a bearish signal. The nearest support is the 55-hour and 100-period (4H) SMAs and the weekly R1 circa 1.15.
In case fundamentals cause high volatility in the market, the Euro might even target the 200-hour SMA at 1.1420. In terms of upside potential, the senior channel and the monthly PP are located at 1.1685.
