Two weeks ago, the EUR/USD pair looked oversold before the bullish engulfing daily candlestick emerged off price level of 1.2500.
The origin of the bullish engulfing pattern (around 1.2600) previously provided a good BUY position as suggested in previous articles.
The upper limit of the movement channel (1.2880-1.2900) was targeted. However, bearish pressure was applied earlier around 1.2800-1.2840.
This allowed a bearish breakout off the current bullish channel to take place. This probably confirms a Flag continuation pattern. Initial daily target level would be located around 1.2490.
As expected, the EUR/USD pair remained under bearish pressure since no fixation above 1.2760-1.2780 took place on a daily basis.
A valid BUY position was previously suggested around the neckline of the bullish Head and Shoulders pattern (price level of 1.2660).
Last week on Wednesday, the market expressed quite strong bearish momentum that pushed below the lower limit of the previous bullish channel.
Bears have successfully pushed towards price zone of 1.2600-1.2620 (the lower limit of the newly established bearish channel).
As anticipated, around this price zone, bullish recovery was expressed at retesting of the lower limit. Bulls were able to push towards 1.2760 ( the upper limit of the channel ).
Price levels around 1.2750 provided a valid SELL entry as suggested in previous articles.
Recommendation:
Price level of 1.2750 corresponded to the upper limit of the newly established channel depicted on the chart.
A valid SELL entry was anticipated around 1.2730-1.2760. It's running in profits now. Stop Loss can be lowered to 1.2700 to offside some risk.
The material has been provided by InstaForex Company - www.instaforex.com
