The price zone of 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.
A Double Top pattern was formed after the neckline located at 1.3700 got broken down. Projection targets have already been hit shortly after.
Previous prominent bullish engulfing daily candlesticks emerged off 1.3500 (the lower limit of the ongoing channel) thus fixating again above 1.3560 (the key level corresponding to the previous prominent bottom).
As long as the backside of the broken bearish channel keeps holding the price above, the bulls will keep pushing higher towards 1.3640 and probably 1.3740.
The EUR/USD pair has been facing difficulty to fixate above the key level around 1.3640-1.3660. Successive bearish candlesticks originated off this price zone.
That's why, bullish fixation above this zone is a must to pursue towards further bullish targets. On the other hand, bearish pressure originated off 1.3650 which is applying pressure on 1.3560 (key level corresponding to the previous prominent bottom ).
As long as the bulls keep defending the recent low around 1.3575, we consider the possibility of a bullish Head and Shoulders pattern with the neckline around 1.3650 with a breakout projection target to be anticipated around 1.3750.
As expected, the price zone between 1.3600-1.3560 ( 50% and 61.8% Fibonacci levels ) has been providing evident bullish price action until earlier today.
As long as the bulls keep defending this demand zone, the bullish momentum is most likely to pursue towards further targets.
On the other hand, breakdown of 1.3550 invalidates the bullish structure allowing the bears to pursue initially towards the price zone of 1.3530-1.3500 where the backside of the broken bearish channel is located.
Bullish pressure is expected to be applied around the current prices provided that the bears fail to fixate below 1.3500.
The material has been provided by InstaForex Company - www.instaforex.com
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