EURUSD maintains its bearish outlook after the breakdown of the key level at 1.1660. The chart pattern on the daily time frame indicates a head and shoulders pattern with a break below the neckline giving a bearish signal.
Resistance at 1.1660 is expected to hold in the near term, as EURUSD continues to trade in a small range just below this level. A daily close below 1.1600 would increase downside pressure and open the way to 1.1470. This level is roughly the mid-point of the upleg from 1.0820 to 1.2091. A deeper decline would target 1.1300, which is the 61.8% Fibonacci retracement level.
A rise above the 50-day moving average and above the right-shoulder high of 1.1874 would confirm the short-term bearish phase has ended. This would bring a re-test of the 1.2091 peak before the resumption of the uptrend from the April lows.
Technical indicators are bearish but RSI is suggesting the near-term bias is neutral. In the bigger picture, sustained trading below the 50-day moving average will keep the bearish outlook in place.
