EURUSD is making higher highs. Price remains inside the bullish channel and as long as price is above 1.1315-1.13 bulls will have the upper hand. The RSI is however not making higher highs and doesn’t follow price. This is a bearish divergence.
Blue lines – bullish channel
Black line – bearish divergence
As long as price is inside the bullish channel bulls have nothing to fear. The bearish divergence in the RSI is just a warning and not a reversal signal. EURUSD could continue making higher highs and higher lows, however traders need to be cautious as this divergence shows signs of a weakening bullish trend. Support is found at 1.13-1.1315 and next at 1.1275. Breaking below this support area will open the way for a move towards 1.1150. Until then we should not rule out a move above 1.14.