The price zone of 1.2880-1.2900 (corresponding to the upper limit of the previous broken channel) was targeted a 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 shortly after, thus confirming a flag continuation pattern. Bearish projected target was already reached around 1.2490.
As anticipated before, 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.
The EUR/USD bears, obviously, need to fixate below 1.2360 soon enough. It has already taken place on the previous Friday. However, today the EUR/USD pair is showing bullish recovery again above it due to the lack of bearish pressure below 1.2255.
Price level of 1.2200 corresponds to the projected target of the current bearish flag pattern as long as 1.2360-1.2390 remains defended by the EUR/USD bears.
The bearish flag scenario should now be considered for the long-term positions. Bears should be looking for a solid SUPPLY ZONE to SHORT the EUR/USD pair again.
A double-top pattern was expressed last week on the 4H chart around 1.2500. As anticipated, fixation below neckline (price level of 1.2430) enhanced the bearish trend on the market.
Fixation below the recently broken bottom around 1.2390 is mandatory to maintain the current bearish momentum towards 1.2200.
Moreover, the EUR/USD pair has a bearish projected target (the flag pattern) roughly located around price level of 1.2200 where the lower limit of the depicted 4H channel is also located.
Trade recommendations:
Intraday traders can SHORT the pair anywhere around 1.2410 -1.2450 (prominent Fibonacci Levels). SL should be set as a four-hour closure above 1.2470.
The material has been provided by InstaForex Company - www.instaforex.com
