EUR/USD may face selling pressure with the 4-hour chart reporting a failed breakout.
The common currency jumped to highs above 1.1160 on Thursday, confirming an upside break of the descending channel from Dec. 31 and Jan. 6 highs.
The breakout signaled an end of the pullback from 1.1240 and a resumption of the rally from the November low of 1.0981.
That bullish move, however, did not happen and the pair fell from 1.1174 to 1.1128, invalidating the descending channel breakout.
A failed breakout is widely considered as a powerful bearish signal. So, a drop to 1.11 or lower cannot be ruled out, more so, as the 4-hour chart RSI has breached the ascending trendline.
A convincing move above 1.1170 is needed to revive the bullish setup. At press time, EUR/USD is trading 1.1136.