• EUR/USD bears taking control and testing bullish commitments at critical daily support. 
• Lower term time frames are bearish as bears move in below mitigation area. 

EUR/USD is in a period of consolidation in thin holiday markets in what otherwise might be regarded as a phase of redistribution which leaves the bias to the downside. The following illustrates the potential for a meanwhile bullish correction on the lower time frames before a restest of the recent lows and the mid-point of the 1.12 area.

EUR/USD daily chart

Following a tweezer top, the price, from a daily perspective, is taking on the support structure and below the resistance formed on the breakout of distribution. The retest of the resistance failed and the bears have been moving in mid-week. This gives rise to the prospects of a downside continuation. 

EUR/USD H1 chart

The price at this juncture could still have some upside to go to mitigate, from an hourly basis, the imbalance towards 1.1280.

However, this area was already filled on a 30-min time frame:

EUR/USD 30-min chart

Therefore, there is the risk of an imminent continuation to the downside. A stop above the mitigation area, aka, 1.1280, could protect shorts against the prospects of hourly mitigation prior to the anticipated run towards 1.1250/1.1215. 

If, on the other hand, if bears fail to take out 1.1200, then the outlook from a medium-term perspective would turn bullish and the consolidation would be regarded as a phase of accumulation leaving 1.1400 vulnerable for the weeks ahead.