EURUSD made a brief correction after bouncing from 1.2246 to 1.2600 but has fallen for the second day and is fast approaching 1.2246 again. The downside bias has gained momentum after breaking back below the 78.6% Fibonacci retracement level at 1.2462 – of the upleg from 1.2040 to 1.3992. RSI has fallen back below, also highlighting the downside bias. The market remains below the Ichimoku cloud.
A break back below 1.2246 will see a resumption of the bearish trend which has been in place since the May 2012 high of 1.3992. The next target would be 1.2040 – the July 2012 low. At this point, the EURUSD would have retraced the entire move up from 1.2040 to 1.3992.