Previously, around the price zone of 1.6780-1.6800, a Double Top pattern scenario was established during February and March. However, the recent lows at 1.6465 and 1.6555 (corresponding to the depicted uptrend line) prevented further bearish decline and provided enough buying pressure to keep pushing higher.
The daily chart shows two successive bullish breakouts expressed above 1.6850 ( upper limit of a previous congestion zone ) then above 1.6930 ( upper limit of the ongoing bullish channel ). The bullish momentum should be apparent now to allow the bullish breakout to pursue towards further targets. Otherwise, breakout failure will probably occur.
The nearest demand zone to meet the pair is located at 1.6775-1.6820. Bulls should be defending this price zone in order to pursue projection targets of the breakout.
As long as the ascending bottoms established at the uptrend around 1.6675, 1.6775 and 1.6825 remain intact, the market will keep its bullish momentum.
The pair has been trending up within the depicted bullish channel for a couple of weeks now. Last week, a bearish impulse was initiated off 1.6910 that led again towards the previous consolidation zone at the price level of 1.6820.
The bearish momentum was contained above 1.6820 (the lower limit of the bullish channel and upper limit of a previous consolidation zone).
The bulls managed to record a higher high above the recent one at 1.6900. However, this may have exhausted the bullish momentum of the market.
Bearish fixation below 1.6840 is necessary to restore the bearish tendency of the market. Otherwise, sideway consolidation will be expected to take place for sometime.
The material has been provided by InstaForex Company - www.instaforex.com
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