The price zone 1.3800-1.3880 ( depicted on the chart ) provided considerable SUPPLY for the EUR/USD pair. This price zone managed to pause the ongoing bullish momentum above the depicted bullish trendline.
Thus, a Double Top reversal pattern is being established with a neckline located at 1.3700 which has already been broken-down during last week’s consolidations.
This indicates the dominant bearish momentum with high probability to achieve the reversal pattern projection targets as long as the bears keep defending 1.3700 handle (neckline of the Double Top pattern).
The estimated projection target of this reversal pattern extends down to 1.3470. However, the 4H chart below will show some important levels to meet the pair on its way towards targets.
Previously, the depicted uptrend line (the blue trendline) came to meet the pair roughly at 1.3700-1.3680 enhancing this price zone as significant intraday demand. This led to the recent bullish impulse above 1.3880.
The recent established bottom around 1.3810 could achieve higher value above 1.3880. The bulls topped at 1.3950. However, these levels corresponded to the upper limit of the ongoing bullish channel which applied significant bearish reaction.
A strong corrective movement towards 1.3850 and 1.3800 was executed immediately as expected. This led again towards 1.3770 and cleared the way towards 1.3690 ( previous prominent bottom ).
The next DEMAND level to meet the pair is located around 1.3560 where the previous prominent bottom was established in February.
For the bulls, the price zone of 1.3560-1.3520 may offer a good BUY opportunity with stop loss located below 1.3500. If so, this bullish corrective movement will be targeting at 1.3690-1.3710.
On the other hand, success of the bulls to fixate above 1.3640-1.3650 ( recent broken bottoms ) threatens the bearish sentiment of the market allowing extension of the bullish targets towards 1.3690-1.3700.
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Performed by Michael Becker, Analytical expert InstaForex Group © 2007-2014 |
Intraday technical levels and trading recommendations on EUR/USD for May 29, 2014
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