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 was already reached around 1.2490.
As anticipated earlier, 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 the bears could fixate below 1.2360 this week, the EUR/USD pair is showing bullish recovery again above it due to the lack of bearish pressure below 1.2255.
Yesterday's daily candlestick spiked up to 1.2446. However, the market came back to close at 1.2373. It could be a sign of indecision about a possible bullish breakout off the upper limit of the depicted movement channel.
Price level of 1.2200 remains 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. Some signs of bearish rejection are being expressed today.
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). Stop Loss should be set at a four-hour closure above 1.2470.
The material has been provided by InstaForex Company - www.instaforex.com
