The EUR/USD fell sharply last week, closing well below 1.3034 swing low support which puts bearish price action in play. In fact, a decline from 1.3195 was very strong and sharp, which in many cases represents an impulsive wave and direction of a trend. As such, we need to respect this price action so it’s better to stick to the downtrend and look for possible short entries.

From an Elliott Wave perspective we are tracking one-two, one-two set-up with sub-wave (ii) now underway to 1.3020/50 resistance area.

The reason why the bearish price action could continue is a broken channel line on the Daily chart as shown below. We would turn bullish again only if the 1.3130 level is passed.