Overview:
On December 17, the market failed to express a bullish breakout above the upper limit of the daily bearish channel. Shortly after, an extensive bearish pressure was applied against the price levels of 1.5540-1.5560 on December 23.
The daily closure below the recent bottoms established around 1.5540-1.5560 rendered the previous consolidation range as a bearish flag pattern with projection target at 1.5300.
The market has already pushed further below this level reaching down to 1.5030-1.4980 where the lower limit of the channel has been providing support for the pair over the past few weeks.
Bullish recovery was manifested on the H4 chart. A bullish breakout above the upper limit of the short-term flag pattern took place. A bearish pullback for retesting is being expressed today.
The key-support level for today is the price level of 1.5120 (backside of the upper limit of the H4 Flag pattern). That is why daily closure should be considered today.
Trading outside the H4 flag pattern (above 1.5120) enhances bullish side of the market at least towards 1.5260.
Trading recommendations:
The price zone of 1.5280-1.5350 (50% - 61.8% Fibonacci Levels and the upper limit of the daily channel) should be watched for new SELL entries with SL located slightly above 1.5400.
A short-term LONG position may be considered if the current daily candlestick closes as engulfing one. TP should be located slightly below 1.5300.
The material has been provided by InstaForex Company - www.instaforex.com
