EURUSD bears continued to press on the lows and finally managed to close a weekly candle below the 1.1850 level. Still, further downside movement is not a given here because the pair is at support, stretching as a zone around the 1.1750 level. This is a tough support to crack and will likely need some fundamental factor or news release as a catalyst to break it. In fact, EURUSD is already bouncing here today.

Under a bearish scenario of a sustained break below the 1.1750 support zone, the potential head and shoulders pattern will get triggered. It would have a downside target of around 680 pips (measured by the height of the head), which points to the 1.11 – 1.12 area on EURUSD. Still, this would likely be a scenario for the long term. For the foreseeable future, EURUSD is more likely to experience notable buying pressures in the 1.16 and 1.15 support zones, even under the above bearish scenario.

To the upside, 1.1850 should act as the nearest resistance zone. This is based on it being a support level previously and also on the resistance line that has kept the moderate downtrend in place since the local highs from June 22-25. A bullish breakout of this small downtrend formation can open up a bigger upside potential, likely toward 1.20. This 1.20 area is the most important resistance for EURUSD traders in the current context and needs to hold to keep the bearish dynamics intact