The EUR/USD is showing strong inclinations to head south. Yesterday's situation proved that bulls are rather weak and have no idea how to stop the recent downtrend. In the mid-term, the price is forming a flag (black lines) that can be considered a trend continuation pattern. The flag is formed above the neck line (red). The neck line is part of the bigger Head and Shoulders formation that is present on a EUR/USD daily chart. With every analysis, the price is putting more pressure on the neck line.
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If the movement breaking out of the flag is strong enough, we shall expect an attack on this red support and a possible further breakout. This scenario is the worst that bulls can imagine, because a confirmation of the H&S formation will cause a general switch in the long-term trend and most traders will begin to sell.
On the other hand, as long as the price stays above the neck line and inside the flag, we can expect a minor rise on this pair. A major upswing can be expected once traders manage to break the 1.2990 resistance.