EURUSD Analysis – could the bullish correction trigger a buy signal?

EURUSD recently experienced a decline as it breached the support line on 1.13 establishing new long-term lows and triggering a sell signal. We correspondingly took a bearish stance on the price as well.

While there hasn’t been any change that would lead us to change our outlook for the price movement, the currency pair has gone through a slight bullish correction. Although it wasn’t a large correction and had only 130 pips, it was still successful. The price has gone back above the 1.13, which was a resistance it broke during its decline. The breach of the line proved that 1.13 wasn’t a very strong resistance in the first place. We are still inside the flag pattern which is shown with blue colors and below the downtrend line drawn in red. As a result, the sell signal is still on and unless the price crosses blue resistance, there won’t be any change to that sentiment.