As the dollar sold off again, the EUR/USD managed to climb to a new 2017 high of around 1.2090 this morning before pulling back as traders booked profit ahead of the weekend. From a technical perspective, there may be a possibility we have seen a near-term top, although at this stage this is just a potential scenario. At around 1.20-1.21, we already know that the EUR/USD is testing key long-term levels, and the ECB is evidently becoming worried about the high exchange rate even if it hasn’t said so explicitly. Interestingly, the EUR/USD has not yet managed a daily close above 1.2040/45 area, which was the last significant low hit back in July 2012, when the Eurozone debt crisis was at its peak. Once support, this level could potentially turn out to be the new long-term resistance going forward. What’s more, the EUR/USD looks like it has failed to hold its break above the prior 2017 high of 1.2067 hit at the end of August, when it formed an inverted hammer candle. Today’s price candle also has a similar shape. These types of candles point to exhaustion and with the RSI also in a state of negative divergence with price (as it has made a lower high near ‘overbought’ level of 70), one can make a case for a EUR/USD reversal here. That being said, though, none of the key support levels have broken down yet to suggest the sellers are taking charge. First and foremost, the bears need to see a break below Thursday’s close of 1.2015. Once this condition is met then they require a break in market structure. The last swing low was at 1.1825 prior to the latest rally. Any move below 1.1825 would technically be bearish as we will then have our first lower low. So taking everything into account, at this stage this is a potentially bearish setup for the EUR/USD. But the bullish view could easily re-establish upon a decisive break above that 1.2040/5 level. In this potential scenario, the bulls may then aim for the next Fibonacci extension levels at 1.2133 (127.2%) and then 1.2218 (161.8%). In any case, the next move on the EUR/USD could be very interesting to observe next week.