The Deepening RSI Divergence On The D1 EUR/USD Time Frame Is A Signal For An Upcoming Correction

EUR/USD is still developing within the upward channel and only a few pips were left until the pair could reach 1.21000 – the local high is currently at 1.20924 after which the pair began to form yet another (shallow, for the moment) correction. The pair is currently at 1.1955.

At the same time, if we examine the D1 time frame we’ll notice that there is a deepening divergence between the last highs.

Additionally, there is also a divergence between the last three highs on the W1 time frame, which could be interpreted as a serious signal for an upcoming deeper correction.

I think that that the pair could reach 1.1700 to the downside, and if it deepens we could see a drop to 1.1500.

The move to the upside could continue a little further and the pair could test 1.2100 – 1.2150. Either way, I think that from a technical analysis point of view there will be a correction soon before the EUR can continue rallying.