The EUR/USD pair has fallen to new lows at 1.3241 but has since rebounded following the release of better-than-expected German PMI data. It has now reached the level of the S1 monthly pivot at about 1.3270. It will probably rotate at this level and continue falling, given the dominant short-term down-trend. However, there is a chance of a bullish reversal because we have reached such oversold levels – and a break above 1.3290 might mark a stronger bounce and the possibility of the reversal in the v.short-term trend.
Whilst there is a possibility of a move down to 1.3220 - the 100% extension of the height of the triangle, the minimum the 61.8% extension at 1.3270 has already been met so the possibility diminishes. On the 4-hr chart RSI has given a buy signal.
Because of the dangers of a reversal I would be looking for a break below the 1.3241 lows for confirmation of more down-side, although the next target is at 1.3220, only 21 pips lower, and because the pair is so oversold, this target is fairly speculative.
