In March, failure of the bulls to fixate above 1.3880 applied enough bearish pressure to form a bearish leg 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.
Since then, the EUR/USD pair has been trapped within a consolidation zone roughly between 1.3800 and 1.3890.
Price level of 1.3800 has been offering support for few weeks until we had bearish breakdown on Friday when the market expressed a strong full-body bearish daily candlestick.
The last bullish breakout above 1.3880 topped at 1.3950 (Notice the most recent top established around 1.3965) showing bearish domination of the market which formed another bearish leg. Thus, a double-top reversal pattern is being established with neckline located at 1.3700.
On Friday, the bears produced quite strong bearish reaction that broke-down 1.3800 recording a daily low around 1.3745. This indicates dominant bearish momentum with high probability to achieve the reversal pattern after breakdown of 1.3700 handle.
Previously, 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 corresponded to the upper limit of the ongoing bullish channel which applied significant bearish reaction.
A strong corrective movement towards 1.3850 and 1.3800 was executed immediately as expected. This led again towards 1.3770 and cleared the way towards 1.3690 ( previous prominent bottom ).
For the bulls, the price zone of 1.3710 - 1.3670 remains the nearest demand level for them to initiate a bullish corrective movement towards 1.3740.
This price zone should be watched for a possible buy position with stop loss as daily closure below 1.3680.
The material has been provided by InstaForex Company - www.instaforex.com
For detail explanation and best discovery on market trends you may visit via Intraday technical levels and trading recommendations on EUR/USD for May 14, 2014 . Thanks for your support on Intraday technical levels and trading recommendations on EUR/USD for May 14, 2014
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