EUR/USD has reached our target of 1.1230-1.12 as we mentioned in our previous analysis and is now bouncing higher. The medium-term trend remains bearish while the short-term trend has reversed and a bounce even towards 1.1380 is possible for the first couple of sessions of this week.

Green line - support trend line

Blue rectangle - possible bounce target area

EUR/USD has held above our green trend line support and target area and bounces above 1.1230. This bounce could push towards 1.13 which was our major support that was broken. We could see a back test of the break down area. It is important for the medium-term bearish trend to see EURUSD remain below 1.13 and then break below 1.12. We warned last week that profit taking from bears could be seen as the RSI was at oversold levels, however we expect more downside as there is no bullish divergence. Any bounce is considered a selling opportunity still as long as price remains below the red trend line resistance.