When bulls pushed the price further above 79.6% Fibonacci level, the market looked quite overbought. That is why, the price failed to hold above 1.2650 – 1.2680 (previous highs), resulting in a formation of successive lower highs (within the depicted consolidation zone) enhancing the bearish side of the market.
Daily fixation below 1.2300 opened a way towards the levels of 1.2000 and 1.1940 (the depicted weekly uptrend).
Bullish support was found around these levels. Successive higher lows were reached. Bullish pressure was applied against the resistance levels of 1.2450 and 1.2500 (previous tops).
On the other hand, the previous weekly candlestick was quite bullish. That is why, an extensive bullish movement is seen on the chart.
A bullish breakout above the zone of 1.2770-1.2800 has been executed.
Earlier, signs of lacking bullish momentum were generated on the chart. A bearish corrective movement was initiated towards the levels of 1.2900-1.2850.
However, a new bullish swing has been taking place this week, especially after bullish engulfing daily candlesticks were expressed on the chart.
The long-term bullish projection target remains projected at the level of 1.3270 (100% Fibonacci Expansion) where bearish pressure may be applied.
The price action should be watched around the price level of 1.3270 if enough bullish support is maintained around 1.3050 (current support level).
Conservative traders can wait for a bearish pullback towards the recent breakout zone (1.2800-1.2750) for a valid buy entry as the breakout level constitutes a strong recent support.
Stop Loss should be located below the level of 1.2700. T/P levels should be located at 1.2850 and 1.2900.
Risky traders can take a valid BUY entry anywhere around 1.3050-1.3000. The first bullish targets would be located at the price levels of 1.3190 and 1.3270.
The material has been provided by InstaForex Company – www.instaforex.com