EUR/USD technical analysis: Off 3-week lows, 4H chart shows falling wedge pattern

• EUR/USD's 4-hour chart is reporting a falling wedge pattern. 
• A wedge breakout looks likely with bullish RSI divergence. 

EUR/USD is currently trading at 1.1203, having hit a low of 1.1193 in the overnight trade - a level last seen on June 19. 

Notably, the recent drop from 1.1412 has taken the shape of a falling wedge pattern on the 4-hour chart. A falling wedge comprises of trendlines connecting lower highs and lower lows in contracting range - a sign of bears losing stream. 

As a result, a breakout is often followed by a rally. in EUR/USD's case, a move above the upper edge of the falling wedge, currently at 1.1217, would confirm a breakout and open the doors to a retest of 1.1264 (4H 200-candle moving average). 

A breakout looks likely as the 4-hour chart relative strength index (RSI) has created a bullish divergence. The prospects of wedge breakout, however, would weaken if the pair finds acceptance below 1.1193, invalidating the bullish divergence of the RSI. 

4-hour chart

Trend: Bullish above 1.1217

Pivot points