In our last EURUSD analysis we warned bears that it justified EURUSD to make a bounce towards 1.18-1.1850. With price having made a low at 1.1703 exactly 3 pips away from our target, we are now seeing EURUSD at 1.1770 making higher highs and higher lows. It is too soon to call a low, but the chances of a major low are high.

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Yellow rectangle – bounce target

Blue lines – bullish divergence

The RSI has given its warnings with a bullish divergence we noted in previous posts. EURUSD is heading higher and our short-term bounce target is at 1.18-1.1850 area. As we explained in ourlast post, towards the end of the week it is highly likely short positions to be closed for profits and this could lead to a bounce. I believe this is what we see today and what we will see tomorrow. A new lower low below 1.17 can not be ruled out but with bearish trend weakening, I believe we should start focusing on the bullish side of EURUSD as a big bounce might come over the next couple of weeks.

The material has been provided by InstaForex Company – www.instaforex.com

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