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). Since then, the pair has been down-trending within the depicted bearish channel.
Again, the EUR/USD pair shooted 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.
Bullish engulfing daily candlestick was expressed on Friday indicating upcoming bullish correction. However, bearish breakout of the consolidation range took place yesterday.
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.
The short-term bearish trend remains intact as long as the bears keep defending the price zone of 1.3420-1.3450.
The EUR/USD pair is expected to meet an Intraday DEMAND level around 1.3275 where the lower limit of the sub-channel is located. Price action should be watched today.
In case the bears keep applying significant bearish pressure, the EUR/USD pair has Intraday DEMAND levels located around 1.3325, 1.3235, and 1.3215 respectively (Fibonacci Expansion Levels).
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.
The material has been provided by InstaForex Company - www.instaforex.com
