In March, the failure of the bulls to fix above 1.3880 applied enough bearish pressure in the form of a bearish channel towards the recent demand zone around 1.3700.
At retesting of 1.3700, significant bullish pressure was applied pausing the recent slide off 1.3965 which led to another ascending impulse towards 1.3880.
On April 11, a bearish Doji candlestick was marked around 1.6880, followed by a bearish engulfing daily candlesticks aiming to apply bearish pressure on the price level of 1.3800. It has been offering support especially on Monday when the depicted long-tailed hammer daily candlestick was noted.
On the other hand, a price level of 1.3800 has been providing the bullish support so far. Wednesday and Friday's daily candlesticks are bullish engulfing daily candlesticks that originated off this level.
At the same time, several bullish attempts (including Tuesday's bullish spike) took place to step above 1.3850-1.3880. However, immediate bearish reaction is usually applied due to lack of the bullish follow-up.
On Tuesday, we had a bullish breakout above 1.3880 which topped at 1.3950 (Notice the most recent top established around 1.3965). Today, the bears expressed quite significant bearish reaction that led immediately towards 1.3850 corresponding to the lower limit of the depicted movement channel.
Since the EUR/USD pair broke below 1.3855, the pair had roughly been moving within a bearish channel until the depicted uptrend line (the blue trendline) came to meet the pair roughly at 1.3700-1.3680 enhancing this price zone as significant intraday demand. This led to the recent bullish impulse above 1.3810 and 1.3880.
Finally, the last bottom established around 1.3810 could achieve higher value above 1.3880. The bulls topped at 1.3950. However, these levels correspond to the upper limit of the ongoing bullish channel.
A corrective movement towards 1.3880 then 1.3850 was executed immediately as expected yesterday.
For the bulls, the price level of 1.3850 down to 1.3810 remains the nearest DEMAND level for them. It should be watched for a possible BUY position with SL as daily closure below 1.3800.
The material has been provided by InstaForex Company - www.instaforex.com
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