In our previous posts we explained that the long-term trend in EUR/USD was bearish and that a short-term bounce towards 1.15-1.16 should come. Yesterday prices fell sharply after getting rejected at 1.15. Short-term trend has turned bearish again and a new low below 1.13 is not out of the question now. However the bullish divergence signs by the RSI give a warning to bears.

Red dots - maximum strength resistance

On a daily basis, the price never closed above the black dots resistance of 1.1470. Trend remains bearish as the price is still inside the downward sloping channel. Support is now at the October 31st low at 1.1302. The RSI (not shown above) is diverging despite the new lows. Price could make a new lower low towards 1.1280-1.1250 but I believe we are going to see another divergence again. This is a warning for bears not to be to confident of this down trend. However as long as price is closing on a daily basis below the black dots, bears remain in control of the trend.