The EUR/USD tried to break above the resistance line (orange) of the downtrend channel but price ultimately made a false breakout. Price has now broken below the support trend line (dotted blue) instead which could extend the bullish correction.
The EUR/USD seems to have completed a bullish ABC zigzag pattern (green). The bearish breakout could indicate more downside pressure but the overall chart pattern remains corrective, which means that the EUR/USD could bounce back up again at the Fibonacci retracement levels. The corrective price action is likely to stay unless price manages to break below the support trend line (blue).
The EUR/USD is building a complex correction but there are multiple wave variations that are equally likely at the moment. Rather than a WXY (blue) correction, price could also be expanding the bearish wave B (green) as long as price stays above the 100% Fibonacci level of wave B vs A for instance. In that case a WXY (orange) correction would take place within wave B (green). A break below the 100% Fib however indicates a larger bearish WXY (blue) correction most likely as part of a wave X (purple).
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