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 at 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 indicating upcoming bullish correction. However, bearish breakout of the consolidation range occured earlier today.
We should wait for the daily closure for confirmation.
On the other hand, 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.
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.
Bearish breakout is likely to be confirmed today. A valid entry is suggested at retesting of 1.3350 with SL located just above 1.3400.
The material has been provided by InstaForex Company - www.instaforex.com
