Let’s get straight to the point. This problem is the false breakout that happened last week. It gave a false hope for a reversal but now, many fooled buyers have to abandon their long positions and this may cause havoc on the most popular instrument on the Forex market.
Last week, EURUSD buyers managed to break two crucial resistances; a horizontal one at the 1.1380 level (yellow) and a dynamic one – blue mid-term down trendline connecting the latest crucial lower highs. That gave us a buy signal, which we now know was fake. This gives us a false breakout pattern (red), which in theory promotes a strong movement in the opposite direction – down.
The price is currently defending the last important support – a dynamic short-term uptrend line but I can’t guarantee that this one will hold. Actually, chances for that are pretty slim and the possibility of a breakout is increasing. A breakout of the black line, should confirm the dominance of the sellers and bring us a long-term sell signal. The odds for that are quite significant.