The price zone of 1.2880-1.2900 ( corresponding to the upper limit of the previous broken channel ) was being targeted one month ago. However, bearish pressure was applied earlier around 1.2800-1.2840 where the depicted head and shoulders reversal pattern was initiated.
A bearish breakout off the bullish channel took place shortly after, thus confirming a Flag continuation pattern. Bearish projection target was already reached around 1.2490.
Daily fixation below 1.2490-1.2500 (the origin of the previous bullish swing expressed one month ago) theoretically extends the bearish targets towards the price level of 1.2200.
As we mentioned, the EUR/USD bears needed to obviously fixate below 1.2490 soon enough ( took place already on Friday ).
Bullish recovery was expressed off 1.2360 resulting in Monday’s daily bullish candlestick.
Price level of 1.2200 corresponds to the projection target of the current bearish flag pattern as long as the bears keep defending the current price zone of 1.2450-1.2490 as their recent SUPPLY zone.
Few ascending bottoms around 1.2400 and 1.2430 ( within the borken depicted bullish channel ) were established.
The EUR/USD pair managed to fixate above price level of 1.2500 for a few 4H candlesticks before the bears managed to apply enough bearish pressure on Friday.
The bearish flag scenario should now be considered for the longer-term positions.
The EUR/USD pair now has a bearish projection target roughly located around price level of 1.2200.
Price zone of 1.2470-1.2490 should now be considered for SELLING the pair at considerable prices.
Stop Loss should be located above 1.2575.
The material has been provided by InstaForex Company – www.instaforex.com