Since January 19th, the EURUSD pair has been moving within the depicted channel with slight bearish tendency.
Few weeks ago, a bullish Head and Shoulders reversal pattern was demonstrated around 1.1200 allowing further bullish advancement to occur towards 1.1300-1.1315 (supply zone) where significant bearish rejection was demonstrated on April 15.
For Intraday traders, the price zone around 1.1235 stood as a temporary demand area which paused the ongoing bearish momentum for a while before bearish breakdown could be executed on April 23.
Short-term outlook turned to become bearish towards 1.1175 (a previous weekly bottom which has been holding prices above for a while)
On the period between May 17th and 20th, a bearish breakdown below 1.1175 was temporarily achieved.
As expected, further bearish decline was expected towards 1.1115. This is where significant bullish recovery was demonstrated bringing the EURUSD pair back above 1.1175.
Recently, The EURUSD pair has maintained bullish persistence above the highlighted price level (1.1175). That's why, further bullish advancement was expected towards 1.1235 which failed to apply any significant bearish pressure.
Bullish breakout above 1.1235 renders it a newly-established demand level to be watched for bullish rejection and a valid BUY.
Bullish persistence above 1.1235 enhances further bullish advancement towards 1.1290 and 1.1320.
On the other hand, bearish persistence below 1.1235 would probably allow further bearish decline to occur towards 1.1175.
Trade recommendations :
Intraday traders should look for a valid BUY entry around the current price levels (1.1220-1.1235).
Initial Target level to be located around 1.1320. Stop loss should be placed below 1.1190.
The material has been provided by InstaForex Company - www.instaforex.com