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.
Since then, the EUR/USD pair has been trapped within a consolidation zone between 1.3800 and 1.3890.
Price level of 1.3800 has been offering support especially on Monday when the depicted long-tailed hammer daily candlestick was expressed.
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.
The bullish breakout above 1.3880 which topped at 1.3950 (Notice the most recent top established around 1.3965) is showing obvious failure today.
Today, the bears produced quite strong reaction that broke-down 1.3800 recording a daily low around 1.3767 (where the uptrend line comes to meet the pair ).
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 strong corrective movement towards 1.3850 and 1.3800 was executed immediately as expected in the previous two days' articles.
For the bulls, the price level of 1.3770 down to 1.3740 remains the nearest DEMAND level for them. It should be watched for a possible BUY position with stop loss as daily closure below 1.3775.
The material has been provided by InstaForex Company - www.instaforex.com
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