The recent congestion zone between 1.6765 and 1.6815 was established during February and March. These levels correspond to the previous tops in a successful Double Top pattern.
The depicted BLUE uptrend line remained intact since it was established in November 2013. However, this time the bulls are retesting the backside of the same broken trend line.
On the 4H chart, strong bearish rejection was expressed off 1.6920 leading to bearish breakdown of the depicted bullish channel as well as successive previous support levels now acting as resistance.
The expressed bearish momentum enhances the bearish side of the market especially at retesting of recently broken support levels as taking place today.
Note the bearish spike that extended below 1.6730 earlier today. Immediate bullish rejection was expressed shortly after the pair reached its average daily range around 1.6725.
This enhances the bullish side of the market at least on intraday basis.
However, the long-term perspective remains bearish aiming to form another bearish limb that would extend below 1.6730 ( the most recent bottom ) as long as the bears keep defending this newly established resistance zone located between 1.6780-1.6820.
If the pair resumes its bearish momentum, we should note that price action should be watched around 1.6650 to take advantage of a possible bullish corrective movement.
The material has been provided by InstaForex Company - www.instaforex.com
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