Four months ago, a prominent bottom was established around 1.0260. This happened after the pair found strong bearish pressure around 1.0555-1.0600, this was followed by intensive bearish momentum that led to 1.0254.
An important key level was located around 1.0505. This was the key level for the last week's movement as the re-closure below it enabled the pair to break down 1.0455 as well, where the lower limit of the depicted consolidation range was located.
The nearest support zone is located around 1.0250. On September 19, the pair expressed a false breakdown reaching 1.0180 where obvious bullish rejection was expressed to get the pair back above 1.0250 again on Thursday, resulting in a bullish hammer weekly candlestick. Since then, the pair has been consolidating within narrow range between 1.0260-1.0340, until we had a bullish breakout at the daily closure of October 8.
Two weeks ago in the absence of important economic data (and no NFPs) from the United States, the market focused on Canada's employment report released on Friday which lead to bearish retracement again towards 1.0340 then 1.0280 (the most recent demand zones).
Bullish momentum was expressed earlier last week until Wednesday when the pair expressed two bearish engulfing daily candlesticks that brought the pair back to retest the lower limit of the ongoing channel around 1.0280.
The price level around 1.0465 remains the nearest considerable resistance for the pair as long as price zone of 1.0335-1.0260 remains defended by the bulls. A valid sell entry is recommended at retesting with SL located above 1.0500.
The material has been provided by InstaForex Company - www.instaforex.com
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