On the daily chart of euro/U.S. dollar (EURUSD) currency pair, we have seen a nice bullish run in 2017—a trend that may not be over yet as the decline from the recent high is still in three waves, so it can be wave four that is now approaching some interesting base channel line.
However, even if the decline is corrective in wave four there is room for more weakness in the short-term, maybe even to 38.2% Fibonacci level.
Now, looking closer on the 4-hour chart, we can see that from March highs pair turned lower into a new five-wave impulsive reaction. An impulse is a five-wave development that indicates the direction of the trend and in our case this is to the bearish side.
That said, at the moment we can see price picking up from 1.1823 level, probably unfolding corrective wave 4 which can see a potential turning point around the 1.1967/1.2040 region, where former swing high and Fibonacci ratios of 23.6/38.2 can react as resistance.