Overview:
Two months ago, the ongoing bearish swing (initiated in March 2014) was hindered at the price level of 1.0620. This price level corresponded to the lower limit of the channel as well as the backside of a steeper bearish one.
In August, bullish breakout off the movement channel took place. This enabled a bullish Flag pattern to be established. Bullish targets were successfully hit, including price level of 1.1230.
Strong bullish momentum has been expressed for a couple of weeks. Note that breaching the price zone of 1.1230-1.1260 and fixation above it triggers new bullish swing towards 1.1290.
On the other hand, a break below 1.1100-1.1070 indicates that the bearish correction will extend further towards 1.0980-1.0950 where a key-support zone is depicted on the chart (the lower limit of the bullish channel and 50% Fibonacci level).
Recommendations:
The price zone of 1.1250-1.1276 (being tested again today) corresponded to previous significant tops on the daily chart. Extensive bearish rejection should be anticipated.
The current price movement may stay trapped inside the current consolidation range for a while. That's why, risky traders can take another SELL entry around 1.1200-1.1245. Bearish targets are located at 1.1075.
Then, the price zone of 1.0980-1.0950 should be watched for another LONG position to make use of the ongoing bullish trend.
The material has been provided by InstaForex Company - www.instaforex.com
