EURUSD broke below the bottom of its ascending channel on the 1-hour chart to signal that a reversal from the uptrend is in the works. Price is finding support around the 1.1227 area, though, and a pullback to nearby resistance levels might follow.
Applying the Fib retracement tool shows that the 61.8% level is close to the broken channel bottom around the 1.1300 mark. The 50% level lines up with the 200 SMA dynamic inflection point and an area of interest. If any of the Fibs hold as resistance, EURUSD could resume the drop to the swing low or lower.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to gain traction than to reverse. However, price is trading above the 100 SMA which is also turning slightly higher to signal that bullish pressure might pick up.
In addition, RSI is starting to point up to signal a return in bullish momentum that could keep the correction going. Stochastic is also pointing up to show that buyers are ready to return without even seeing oversold conditions.
Economic data from the euro zone has been mostly weaker than expected while the ECB appears to be shifting to a more dovish stance than usual. The US has seen a few positive data points, but the upcoming advance GDP reading could set the tone for longer-term price action and interest rate expectations.
Keep in mind that the euro is also being weighed down by Brexit uncertainty while the dollar typically draws support from risk-off flows. Trade tensions are also in play between the EU and the US as the latter has been talking of tariffs on $11 billion worth of products.