The price zone of 1.2880-1.2900 (corresponding to the upper limit of the previous broken channel) was targeted month ago. However, bearish pressure was applied earlier around 1.2800-1.2840 where the depicted head and shoulders reversal pattern was established.
A bearish breakout off the bullish channel took place soon, thus confirming a flag continuation pattern. Bearish projected target already reached the level around 1.2490.
Daily fixation below 1.2490-1.2500 (the origin of the previous bullish swing expressed one month ago) extends the bearish targets towards the price level of 1.2200.
After bears could fixate below 1.2360, the EUR/USD pair has shown bullish recovery again above it due to the lack of bearish pressure below 1.2255.
Price level of 1.2200 remains the projected target of the current bearish flag pattern as long as 1.2500 remains defended by the EUR/USD bears. Until then, the EUR/USD pair remains trapped within the current DAILY consolidation zone of 1.2360 - 1.2500.
The double-top pattern was expressed last week on the 4H chart around 1.2500. As anticipated, fixation below neckline (price level of 1.2430) enhanced the bearish trend on the market.
Last week, bulls spiked up to 1.2496. However, the market came back to trade below 1.2400. It could represent a failed bullish breakout off the upper limit of the depicted movement channel.
Fixation below the technical key level of 1.2370 is mandatory to maintain enough bearish momentum to push towards 1.2200. Thus, confirming another double-top reversal pattern.
On the other hand, 4H closure above the price zone of 1.2460-1.2480 ( Wednesday's daily high ) invalidates the suggested bearish scenario temporarily exposing price levels of 1.2580 for retesting.
Trade recommendations:
As anticipated before, intraday traders can SHORT the pair anywhere around 1.2450 ( 61.8% Fibonacci Level ).
Stop Loss should be set at a four-hour closure above 1.2470. Target level should be located around the price level of 1.2200.
The material has been provided by InstaForex Company - www.instaforex.com
