Breakout above 1.3450 allowed the bulls to push within the bullish channel to hit further supply levels around 1.3650 then 1.3750. This bullish momentum was taking place until obvious bearish rejection was expressed at 1.3850 (failing to reach 100% Fibonacci Expansion at 1.3904).
A breakdown of the depicted bullish channel took place shortly after (January 2). This led to the previous bearish movement that almost reached 1.3520.
Bullish rejection took place at 1.3520 this week, this led to a strong bullish engulfing daily candlestick. This was expressed after few days of consolidation around SMA-100.
Obvious bullish rejection took place off Price level of 1.3515 which is an important key-level on the intraday basis (corresponds to previous price ranges that goes back to December as well as the lower limit of the channel).
The pair is still moving within the depicted channel probably heading to test the upper limit at 1.3745 where bearish rejection is expected to be found.
On the other hand, the bears need to achieve 4H fixation above 1.3700-1.3740 in order to gather enough bullish momentum to push towards 1.3800. Otherwise, another bearish impulse towards 1.3530 would be expected.
The material has been provided by InstaForex Company - www.instaforex.com
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