On the weekly chart, the EUR/USD pair is demonstrating a high-probability Head and Shoulders reversal pattern where the right shoulder is currently in progress (recent bearish engulfing weekly candlestick).
On September 10, the price level of 1.1500 offered temporary bullish recovery. A quick bullish movement was demonstrated towards the upper limit of the price range (1.1750). However, the EUR/USD bulls failed to pursue towards higher bullish targets.
Instead, evident bearish momentum is being demonstrated on the daily chart. The current bearish decline is currently taking place below 1.1520 (the lower limit of the consolidation range) towards the price level of 1.1420.
As for the bearish side of the market to remain dominant, the EUR/USD pair should achieve bearish breakdown below the price level of 1.1420.
The first bearish target would be located around 1.1275 if sufficient bearish momentum was demonstrated below 1.1420.
However, early signs of bullish recovery were demonstrated around 1.1430 yesterday. This brings the EUR/USD pair again towards 1.1520 for retesting.
Re-closure above the price level of 1.1520 brings the EUR/USD pair back inside the depicted consolidation range (1.1520-1.1750) for more sideway consolidations until a breakout occurs in either direction.
The material has been provided by InstaForex Company - www.instaforex.com