Few months ago, the price levels around 1.0620 (corresponding to the lower limit of the channel) initiated the current strong bullish swing.
A bullish breakout off the movement channel took place in August. Since then, following short time of sideway movements, the pair has been trending-up within the depicted bullish channels.
Bulls were pushing towards the upper limit of the movement channel (1.1370) in mid-October. Immediate bearish rejection was expressed as anticipated after such a long bullish swing resulting in a bearish correction towards 1.1200.
4H fixation below 1.1230 – 1.1210 ( 50% Fibonacci level ) temporarily allowed bears to push towards 1.1100 ( the lower limit of the bullish channel ) where bullish recovery was expressed.
Last week, bulls have pushed further above price level of 1.1400. However, the upper limit of the movement channel was located around 1.1470 where bearish rejection was anticipated.
Bulls have a solid Intraday Support level located around 1.1280-1.1310 where the most recent daily top is located. Bullish positions maybe offered there at retesting.
Note Wednesday’s daily bullish candlestick ( long lower tail ) which indicated SUPPORT being offered around these levels followed by Yesterday’s bullish candlestick. However, the market isn’t showing any bullish follow-up so far.
Another bearish pull-back towards price level of 1.1250 should be anticipated before further bullish breakout can take place.
Price action should be watched at price zone of 1.1250-1.1270 for a possible BUY entry if significant rejection is expressed.
Otherwise, the pair may continue trending-down towards 1.1220 ( Significant Fibonacci Level and the lower limit of the ongoing channel ) where a more dependable with lower risk bullish position can be offered. Stop Loss should be set as daily closure below 1.1200.
The material has been provided by InstaForex Company – www.instaforex.com