March was a correction month for the EUR/USD. It seems like April is the month when the EUR/USD will come back to the primary, dominant trend – bearish.
Firstly, the main downtrend stopped around 1.08. Why there? That was where we had the lower line of a long-term symmetric triangle pattern (red), which is a great spot to capture some profits.
The bullish bounce formed a flag pattern (black). Flags promote the breakout in the direction of a trend. So, in this case, to the downside and this kind of breakout happened yesterday. According to price action rules, the correction ends and gives us a mid-term sell signal.
The most probable scenario, for now, is a further drop. As for the target, it seems like the EUR/USD pair will test the lower line of the triangle again. That gives us a possible movement of around 150 pips.
Keep in mind that the price can go even further. A breakout of the lower line of the triangle would mean a long-term sell signal, but that doesn’t seem to be the story for the nearest future.
