The price zone 1.3800-1.3880 (dotted on the chart) provided considerable SUPPLY for the EUR/USD pair. This price zone managed to pause the bullish momentum that originated off the depicted bullish trend line.
Thus, a Double Top reversal pattern was established with a neckline located at 1.3700. This reversal pattern has already hit its projection levels.
On the other hand, we should highlight Thursday and Monday's bullish engulfing daily candlesticks which emerged off 1.3500 (the lower limit of the ongoing 4H channel) thus fixating again above 1.3560 ( Key-Level corresponding to previous prominent bottom).
Thus, the EUR/USD bulls finally achieved bullish breakout above 1.3560 by reaching price level of 1.3650 which corresponded to the breakout projection target and the upper limit of the depicted channel as well.
The market keeps showing confusion at retesting of 1.3660. This is manifested in the previous few daily candlestick (an Inverted Hammer of Thursday and a Bearish Doji of Friday ) exposing 1.3560 again for retesting.
Multiple ascending bottoms were established after hitting 1.3500 during June that's why, bullish recovery may originate off these levels as long as the bulls keep defending the recent low around 1.3500.
On the other hand, 4H fixation below 1.3550 would expose lower targets for retesting which is quite far away from happening at the current situation.
The material has been provided by InstaForex Company - www.instaforex.com
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