As of right now, it does seem that the pair might consolidate or retrace a little before continuing its downward trend. Technically we are seeing resistance at 1.31175 & support at 1.27619.
As a more immediate trade we have an inside day candle that got posted as a close to its lows; which in terms of price action trading could indicate two things:
1) Eurusd has bottomed out in the near term; and a break above 1.29864 (the high of Friday) could indicate a short corrective rally to 1.31175. A good trading idea would be to sell at resistance which will lead to a better R:R trade.
2) However; if that doesn’t pan out than of course the candles setup should be viewed as a continuation pattern; which according to price action trading has a higher probability of occurring. One can trade this as a breakout strategy by going short below the low of Thursday (1.29168).
Both trades should target an interim price of 1.27619 (near term support) and then at 1.25.
Note: always be careful of stop loss hunting, and or fake outs especially in breakout/ momentum trading strategies.
An alternate view: If however EURUSD breaks through its resistance at 1.31175; then it can retrace further up to 1.33239 or then somewhere in between the levels of 1.31175 & 1.35200. There is a good possibility for this happening too, because whenever the open interest is heavily pitted in one direction, in this case the short side; then the market bounces back because of a lack of supply to fill those orders.
Please also note, we do not recommend to go long at a break of 1.31175 as the trend is clearly downward but it would be a good idea to sit out and wait for those levels to open shorts as the R:R will be a whole lot better.
In either case be mindful, fluid but yet strategic around the price levels mentioned and trade accordingly.