EURUSD has found support above 1.28 and is trying to make an upward bounce and reach the 1.2950-1.30 area. The upward correction scenario is supported by the fact that prices have managed to break out of the downward sloping channel from 1.32. This can be seen in the chart below.
The green downward channel has been broken and prices will try to reach the 50% and 61.8% Fibonacci retracements. The current upward move has a 3 wave form that agrees with our view that the upward move is corrective. We believe that the major trend is down and after the correction is over, it will resume to put pressure on EURUSD prices towards 1.25.
In the chart above you can see the form of the upward move in a clearer way. There is no clear upward formation and the fact that there is no such evidence combined with the fact that prices mostly make overlapping moves, strengthens our view that this move is corrective. As long as prices hold above the green trend line we will assume that we are still making the upward correction. As soon as prices break below the red support level at 1.2840, we believe that downward pressures will accelerate the decline towards 1.27 at first.
As always, thank you for taking the time to catch up on my thinking.