The price zone of 1.3800-1.3880 (dotted on the chart) managed to pause the previous bullish momentum, thus initiating the current downtrend within the depicted bearish channel.
Several congestion zones were established around the price levels of 1.3515 and 1.3335 before further bearish decline could take place.
Yesterday, the EUR/USD pair showed bullish recovery around price level of 1.2860. Successive bullish hammer daily candlesticks are being expressed around these price levels.
The pair is currently testing the lower limit of the depicted channel. High incidence of bullish reversal is present
Recent bullish recovery is witnessed on the chart. A possible bullish Head and Shoulders pattern is being established with projection target located at 1.3075.
Four-Hour fixation above 1.2985-1.3000 ( neckline of the reversal pattern ) is essential to acquire enough momentum to initiate a bullish corrective move towards 1.3100 and 1.3150.
The nearest bullish destination is located at 1.3180 where the upper limit of the ongoing bearish channel and 38.2% Fibonacci Level are located. A good SELL entry can be taken there.
The current medium-term bearish trend remains intact as long as bears keep defending the price zone of 1.3170-1.3270 (the price zone between 38.2% and 50% Fibonacci levels ).
On the other hand, bearish slide below 1.2855 invalidates the mentioned bullish reversal pattern. Thus, bearish decline towards 1.2745 would be expected then.
The material has been provided by InstaForex Company - www.instaforex.com
