EURUSD Hit the 1DMA50. Bullish breakout or bearish continuation?

The EURUSD pair has been trading within a long-term Channel Down pattern since the February 04 High. Today it hit the 1D MA50 (blue trend-line) for the first time since September 13, which was a Lower High on this Channel Down. We also had a near rejection on October 05. We have predicted this Lower High move on our following idea, a month ago:


This is the first time we've had so many successive tests and that has caused the absolute bearish structure at the start of the Channel to change. As you see it followed a strong sell (red channel), consolidation (grey circle) and sharp Lower Low drop (red arrow) sequence. That sequence has broken since the September 12 1D MA50 test, but the trend remains bearish regardless. This however could be an early sign that the long-term bearish sentiment is losing strength.

However, a 1D RSI break into its multi-month Resistance Zone, should be taken as a bearish signal targeting the 0.95392 Low and (under circumstances that we will discuss), the -0.236 Fibonacci extension (as a Lower Low to the long-term Channel Down). However a break above 1.000, which is the last Lower High, would invalidate this pattern, and even more so a closing above the 1D MA100 (green trend-line) would confirm the long-term trend shift as this trend-line has been untouched since February 11, basically throughout the whole Channel Down structure.

For us, the range within the 1D MA50 and 1D MA100 is a no-trade zone but a break above the 1D MA100 would be a buy signal, targeting the 1D MA200 (orange trend-line).

Check below, how well this Channel Down pattern has played out for us since late August:




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