The pair reached the diagonal resistance trend line of the wide trend channel in which it has been developing since December 2016, but it made no attempt to break out and renewed its depreciation.
The depreciation could be just a test of the support at 110.50 in order for the pair to gather liquidity before it attempts to break out above 111.20. The alternative scenario is for a continuation of the depreciation toward 110.20 – 110.00.
The most extreme scenario is for the breakout above the red trend line to have been false and for the USD to continue falling, moving within the red trend channel.
We could think about a long term rally only after a breakout above the red trend line, a breakout above 111.20 and if the pair remains above that level.