Since December 30, the EURUSD pair has trended-down within the depicted bearish channel until the depicted two successive Bottoms were established around 1.0790 then 1.0650 where the EUR/USD pair looked OVERSOLD after such extensive bearish decline.
Few weeks ago, the EURUSD pair has expressed significant bullish recovery around the newly-established bottom around 1.0650.
The following bullish engulfing H4 candlesticks as well as the recently-demonstrated ascending bottoms indicated a high probability bullish pullback at least towards 1.0980 and 1.1075 (Fibonacci Level 50%).
Key Supply-Levels in confluence with significant Fibonacci levels are located around 1.1075 (50% Fibonacci) and 1.1175 (61.8% Fibonacci) where bearish rejection was highly-expected.
Moreover, a Head & Shoulders continuation pattern was demonstrated around the price levels of (1.1000 – 1.1075).
Shortly after, further bearish decline was demonstrated towards 1.0800 where the nearest demand level to be considered was located near the backside of the broken channel (1.0800-1.0750).
Early signs of Bullish rejection have been manifested around the price zone of (1.0800-1.0750) leading to the current bullish spike up to 1.0930.
This supports the bullish side of the market as long as bullish persistence is maintained above the recently-established ascending Bottom around 1.0770.
Further bullish advancement is expected to pursue towards 1.1000 and 1.1075.
On the other hand, any bearish breakout below 1.0770 invalidates the previously-mentioned outlook.
Trade recommendations :
Intraday traders can wait for another bearish pullback towards the mentioned demand-zone around 1.0800 – 1.0750 for a valid short-term BUY signal.
S/L to be placed below 1.0740 while Initial T/P level to be located around 1.0870, 1.0920, 1.1000 and 1.1075.
For those who caught the initial bullish trade just above 1.0800, Stop Loss should be elevated to 1.0800 to offset the associated risk of the trade.
The material has been provided by InstaForex Company – www.instaforex.com
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