We have warned bulls after the break of the bullish channel that was combined with a bearish RSI divergence. Since then we were talking about a pull back towards at least the 38% Fibonacci retracement level.

Red lines - bearish divergence

EURUSD is approaching our first target at 1.2050 and the 38% Fibonacci level. Trend is bearish in the short-term as price has started making lower lows and lower highs. A first bounce could come from this Fibonacci support at 1.2050 but bulls need to be very cautious.

Green line - support trend line

Taking a look at the bigger picture in EURUSD bulls should be very cautious as we could be at the early stages of a bigger pull back towards the 38% Fibonacci retracement of the longer-term upward move from 1.06. Support by the long-term upward sloping green trend line is at 1.1940. The 38% Fibonacci retracement is at 1.1685. Of course it is too early to talk about such a big pull back, but the chances of this happening are increasing as price falls.