EUR/USD broke out and below the triangle pattern last week. This was a bearish sign. Price is bouncing and could make a back test of the lower triangle boundary early this week. A rejection at the lower triangle boundary would be another bearish sign that would make me expect price to move towards 1.12 and lower. So far our first target of 1.1270 after the break of the triangle has been reached.
Blue lines - triangle pattern
Green line - RSI Support
EUR/USD is bouncing back above 1.13. We consider this bounce as a back test of the broken triangle pattern. If however price moves back inside the triangle, we will start looking at this move as a failed break down. This would be a bullish sign. Breaking above the upper triangle boundary would be a confirmed failed break down and this would be an even more bullish sign. Trend change will happen only if the red trend line resistance breaks. Bears on the other hand want to see prices get rejected at 1.13-1.1320 and move lower. If the Daily RSI breaks below the green trend line support, we should expect prices to move towards 1.11.
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