EURUSD made a low today at 1.1991 and is now trading at 1.2079. Price is bouncing strongly of the 1.20 area and so far price has retraced nearly all the way to the 38% Fibonacci level. The first important short-term resistance is at the 38% Fibonacci retracement at 1.2086.

Next important resistance is at the 61.8% Fibonacci retracement at 1.2145 and as long as price is below that level we consider this upward move as a bounce and a selling opportunity. Bears expect the creation of a lower high between 1.21-1.2150 and then a reversal lower to break recent lows. Bulls on the other hand need to defend 1.1990 low and start making higher highs and higher lows in order to recapture the 1.2150 resistance area and the recent high at 1.2242.

On a weekly basis a close above 1.20 is crucial for bulls, while a close below 1.20 will open the way for more downside over the next few weeks. Last week price was unable to hold above 1.21. This week bulls stepped in again when price fell below 1.20 as they did the previous weeks. EURUSD is at a very important junction. Traders need to be very cautious.