EURUSD has been moving in horizontal trend (consolidation) for more than 2.5 years, from which we broke up in July. It is worth noting that as a result of these increases pair reached a significant 1.1900 resistance level, where the first supply reaction occurred.
If this zone would be permanently rejected, we could expect a deeper bearish correction. Supporting this scenario may also be the fact that for a long time market has moved almost continuously to the north and some recovery can be expected here.
Looking at H4 chart, we note that recent growth was within the channel from which we broke out thru the bottom on Tuesday and whose lower limit is currently being re-tested from below (as a resistance). It is also worth noting that this resistance is also coinciding with the upper limit of the downward channel lasting since the beginning of the month and its vicinity has already seen the first supply reaction. Rejection of this zone (confluence of resistance) could open the way to further declines.
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However, in order for the downsides to continue, first we would have to defeat the local support 1.1753 in the area we are currently in.
