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EUR/USD Trapped in a Triangle

I have been bearish on the EUR/USD, but in the past month, the price action has been very choppy. While I might not be wrong about the bearish outlook in the medium-term, we are seeing bullish action in the short-term since last week.

EUR/USD 4H Chart 8/10

(click to enlarge)

The 4H chart shows that the market has turned into a triangle after failing to break below 1.08. Last week, EUR/USD made a low near 1.0850, reflecting a triangle pattern. 

As EUR/USD rallies towards 1.1075 and as the 4H RSI pushes above 70 (overbought territory), we might think about a possible sell. This sell would be based on 1) a technically bearish market in the larger time-frames (Daily and Weekly), 2) divergence of central bank stance where the FOMC is slightly hawkish and the ECB has been dovish, and 3) technical factors in the short-term  (triangle resistance; overbought condition; sideways if not bearish market) .

The downside has a short-term conservative target of 1.09-1.0925, while a more aggressive target is around 1.08. A break below 1.08 will be needed to revive the bearish market in the medium-term, which would open up the 1.0460-1.0520 lows on the year.