On Monday, the EUR/USD currency pair surpassed the monthly S1 at 1.1220. During today’s morning, the pair tested the support formed by the Fibonacci 38.20% retracement at 1.1200.
If the given support level holds, it is likely, that the exchange rate could reverse north in the nearest future. However, note, that the rate has to surpass the 55-hour moving average, currently located at 1.1227.
On the other hand, the pair could trade sideways within the cluster formed by the given Fibonacci retracement and the monthly S1.
From a theoretical point of view, it is unlikely, that the pair could drop lower than 1.1190 due to the support of the lower line of the short-term descending trend.
