The rebound late last week took EURUSD almost to the 1.18 level and has since stalled there. The bulls may try to take the price higher, but it’s likely that they will encounter stronger resistance at levels above 1.18. This week we are taking a look at the near-term picture for EURUSD on the daily timeframe. For more on our weekly outlook and the potential head and shoulders pattern, see our analysis from last week here.

The daily chart below shows that a new downtrend has formed on the pair, with a resistance trendline coming in around the 1.1850 level. Above it, the 1.19 price zone is also likely to be resistance based on prior highs and the 55-day moving average (blue line). So, on the daily chart, all three round number levels are likely to provide resistance, 1.18, then 1.1850, and then 1.19.

To the downside, support is seen at 1.17, near the most recent lows. If the downtrend channel holds, the projection suggests EURUSD can decline below 1.1650 in the next couple of weeks.