Overview:
On December 17, the market failed to express a bullish breakout above the upper limit of the daily bearish channel. Shortly after, an extensive bearish pressure was applied against the price levels of 1.5540-1.5560 on December 23.
Daily closure below the recent bottoms established around 1.5540-1.5560 rendered the previous consolidation range as a bearish flag pattern with projection target at 1.5300.
The market has already pushed further below this level reaching down to 1.5030 where the lower limit of the channel provided significant support for the pair.
Bullish recovery was manifested on the H4 chart off the price level of 1.5030. However, since the pair hit the recent high around 1.5260, successive bearish pressure has been applied resulting in the flag pattern on the H4 chart.
As anticipated, within such a strong bearish trend, the market failed to fixate above 1.5200 (the upper limit of the flag pattern) followed by H4 breakdown below 1.5150 and 1.5100. If so, further bearish tendency on the market should be anticipated towards 1.4930-1.4900 initially.
The key-support level for today's movement is located at 1.4970 (Thursday's low). Fixation above it probably enhances bullish side of the market towards 1.5150, 1.5260.
Trading recommendations:
The price zone of 1.5350-1.5380 (50% - 61.8% Fibonacci Levels and the upper limit of the daily channel) should be watched for new SELL entries with SL as daily closure above 1.5400.
Suggested short position after the H4 closure below 1.5080 is running in profits now. SL should be advanced to 1.5050 to offside some of the risks. Final target can be set at 1.4950.
The material has been provided by InstaForex Company - www.instaforex.com
