The market has been pushing lower aggressively after breaking below the major DEMAND LEVELS around 1.2100 and 1.2000 where historical bottoms were previously established back in July 2012 and June 2010.
The pair has lost almost 800 pips since the beginning of 2015. Moreover, theoretical long-term bearish targets would be located near 0.9450, especially after the obvious MONTHLY closure of January took place below 1.2000.
On the daily chart the market looked oversold below the price levels of 1.2000 and 1.1900 (prominent psychological SUPPORT).
As mentioned in the previous articles, conservative traders should be waiting for a bullish pullback looking for better prices to SELL the pair off (R1 at 1.1550 and R2 at 1.1700).
The price zone of 1.1440-1.1470 is a recently established SUPPLY zone on the H4 chart. Short-term SELL positions can be taken there. Stop loss should be placed slightly above the price level of 1.1530 (the recent high).
Note the recent ascending bottom established around 1.1250 on the DAILY chart. This applies considerable bullish pressure on 1.1440-1.1470. That is why a bullish breakout above 1.1540 scenario should now be considered. If so, the next destination for the pair would be the price level of 1.1700.
Moreover, risky traders should note that DAILY fixation again below 1.1260, which is a recent DEMAND level depicted on the H4 chart, activates a DOUBLE-TOP reversal pattern exposing the recent lows around 1.1110 for retesting.
The material has been provided by InstaForex Company - www.instaforex.com
