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EUR/USD Holds Under 1.1240; Bearish Continuation Scenario

The EUR/USD has been consolidating throughout February after falling to a low on the year at 1.11. Then it rallied back to about 1.15 and started to drift sideways. There was a smaller range within this range, between 1.1270 and 1.1450. Yesterday, price broke below the 1.1270 support and came down to the 1.12 area before stalling.

EUR/USD 1H Chart 2/27

(click to enlarge)

The 1H chart shows the EUR/USD's bearish breakout. We can also see that as we get into the US session, price has held below 1.1240-50 area, and there appears to be some volatility to the downside. Even if price climbs back to 1.13, there bearish outlook would remain intact especially if the 1H RSI holds below 60. 

Now, price is falling below 1.12 as I write this report, and the next key support will be around 1.11. EUR/USD looks poised to test this support with risk of breaking lower. The 1.10 handle would be the next potential support below 1.11.