The price zone of 1.2880-1.2900 (corresponding to the upper limit of the previous broken channel) was targeted month ago. However, bearish pressure was applied earlier around 1.2800-1.2840 where the depicted head and shoulders reversal pattern was established.
A bearish breakout off the bullish channel took place soon, thus confirming a flag continuation pattern. Bearish projected target already reached the level around 1.2490.
Daily fixation below 1.2490-1.2500 (the origin of the previous bullish swing expressed one month ago) extends the bearish targets towards the price level of 1.2200.
After bears could fixate below 1.2360, the EUR/USD pair has shown bullish recovery again above it due to the lack of bearish pressure below 1.2255.
The price level of 1.2200 remains the projected target of the current bearish flag pattern as long as 1.2500 remains defended by the EUR/USD bears.
Until then, the EUR/USD pair remains trapped within the current DAILY consolidation zone of 1.2360 - 1.2500. Bullish breakout is taking place today. Daily closure above price level of 1.2500 directly exposes 1.2620 for retesting.
During last week and this one also, bulls spiked up to 1.2496 twice. However, the market came back to trade below 1.2400 shortly after.
Yesterday, the market applied quite significant bullish pressure at retesting of price level of 1.2410 where the lower limit of the depicted channel is located.
As anticipated, 4H closure above the price zone of 1.2460-1.2480 (Wednesday's daily high) invalidated the bearish scenario temporarily exposing the price levels of 1.2580-1.2600 for retesting.
Trade recommendations:
Intraday traders can wait for a bearish pull-back towards price levels around 1.2460 for a LONG position.
Stop Loss should be located below 50% Fibonacci level around 1.2400.
The material has been provided by InstaForex Company - www.instaforex.com
