The price zone of 1.3800-1.3880 (dotted on the chart) provided considerable SUPPLY for the EUR/USD pair. This price zone managed to pause the bullish momentum leading to obvious breakdown of the depicted bullish trend line.
Bearish pressure which originated off 1.3650 has applied enough pressure on the price level of 1.3560 (corresponding to the previous prominent bottom) exposing the price levels around 1.3360 where bullish recovery was witnessed last week.
Again, the EUR/USD pair has pushed lower towards 1.3330 (prominent bottom established on November 8, 2013), once more after the initial testing that followed the release of the initial readings of the Italian GDP last Thursday.
Recently, the EUR/USD pair has been downtrending within the depicted sub-channel until bullish pressure was applied around 127% Fibonacci Expansion (1.3345).
Bullish engulfing daily candlestick was expressed on Friday. This indicates a possible double bottom reversal pattern with a bullish projection target roughly around 1.3500-1.3520
Bullish fixation above 1.3440 is essential to acquire a momentum strong enough to initiate a bullish corrective move towards 1.3530.
Bearish breakdown of the price level of 1.3430 allowed the pair to establish a consolidation zone down to 1.3330. Since then the EUR/USD pair has been trapped inside this price range.
Note the bullish pressure being applied around price levels of 1.3330.
Multiple bottoms are being established with failure of the bears to achieve bearish breakout so far.
The short-term bearish trend remains intact as long as the bears keep defending the price zone of 1.3420-1.3450.
In case the bears keep applying significant bearish pressure, the EUR/USD pair has Intraday DEMAND levels located around 1.3325, 1.3290, and 1.3275 respectively (Fibonacci Expansion Levels).
On the other hand, bullish fixation above 1.3430 ensures a deeper bullish correction towards 1.3520 and 1.3550.
Range breakout is likely to occur soon. A valid entry is suggested in the same direction of the breakout.
The material has been provided by InstaForex Company - www.instaforex.com
