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 a Triple-top pattern.
Successive lower highs were reached 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 bottoms were established. Bullish pressure was applied against resistance levels of 1.2450 and 1.2500 (previous tops).
On the other hand, the previous weekly candlestick came quite bullish when the pair needed frank weekly closure below 1.2300. This reflected a lack of enough bearish momentum.
That is why, an extensive bullish movement is being seen on the chart. A bullish breakout above the price zone of 1.2770-1.2800 has been executed.
The long-term bullish projection target would be located at the level of 1.3080 if enough bullish support remains around the recently established zone (1.2750-1.2800).
Conservative traders can wait for a bullish pullback towards 1.2800 or probably slightly lower, for a valid buy entry with a low risk/reward ratio (breakout level = recent support).
The material has been provided by InstaForex Company – www.instaforex.com