A bullish breakout above the previous consolidation zone between 1.2400 and 1.2800 was performed on July 15 (shown on the weekly chart).
A significant bearish rejection was observed around 1.3450. Hence, another consolidation range was established from 1.3450 down to 1.2800.
On December 7, a bullish breakout above 1.3450 (the upper limit of the recent consolidation range) enhanced the bullish side of the market. Hence, a bullish visit to the resistance level of 1.4120 (Fibonacci Expansion 100%) was executed.
Bullish persistence above 1.4150 enhanced the bullish side of the market towards 1.4650 (141.4% Fibonacci expansion) where an evident bearish rejection was expected (bearish engulfing weekly candlestick).
The recent bullish recovery was seen around the level of 1.3750. That is why, the recent bullish pullback took place towards 1.4000 two weeks ago.
The level of 1.4120 (Fibonacci Expansion 100%) remains a significant key level to be watched for further price reactions.
On the other hand, the zone of 1.3370-1.3400 stands as a significant support zone to be watched for a valid buy entry.
Trading recommendations:
Conservative traders should wait for the current bearish pullback towards the zone of 1.3370 for a valid buy entry. S/L should be located below 1.3320.
The material has been provided by InstaForex Company - www.instaforex.com