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 established. Bullish pressure was applied against the resistance levels of 1.2450 and 1.2500 (previous tops).
On the other hand, the previous weekly candlestick came frank bullish. That is why, an extensive bullish movement is seen on the chart.
A bullish breakout above the price zone of 1.2770-1.2800 has been executed.
Earlier, signs of lacking bullish momentum were manifested on the chart. A bearish corrective movement was initiated towards the levels of 1.2900-1.2850.
However, a new bullish swing is taking place today, especially after Friday's bullish engulfing candlestick.
The long-term bullish projection target would be located at the level of 1.3270 if enough bullish support is maintained.
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 the 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.
The material has been provided by InstaForex Company – www.instaforex.com