Friday’s large and aggressive downside move led to a fresh 27-month low of 1.2357. Since then prices have consolidated just above this level and hugged the 78.6% Fibonacci level (1.2460) of the upleg from 1.2040 (July 2012 low) to 1.3992 (May 2014).
A break below 1.2357 will open up a test towards the key psychological level of 1.2300. To the upside te market is capped at the 1.2600 level.
Overall the trend for EURUSD is bearish as the market remains below the Ichimoku cloud and the tenkan-sen and kijun-sen lines are negatively aligned. The RSI is in bearish territory although it has levelled off for now just above oversold territory, suggesting some consolidation in the near-term, waiting for a catalyst for another move lower.