On December 30, a bearish ABC reversal pattern was initiated around 1.1235 (Previous Key-zone) just before another bearish movement could take place towards 1.1100 (In the meanwhile, the EURUSD pair was losing much of its bearish momentum).
One more bullish pullback was executed towards 1.1175 where the depicted key-zone as well as the recently-broken uptrend were located. That’s why, quick bearish decline was executed towards 1.1100 then 1.1035 which failed to provide enough bullish SUPPORT for the EURUSD pair.
Further bearish decline took place towards 1.1000 where the pair looked quite oversold around the lower limit of the depicted bearish channel where significant bullish rejection was able to push the pair back towards the nearest SUPPLY levels around 1.1080-1.1100 (confluence of supply levels (including the upper limit of the channel).
Since then, the pair has been down-trending within the depicted bearish channel until this week when bearish decline went further below 1.0950 and 1.0910 (Fibonacci Expansion levels 78.6% and 100%) establishing a new low around 1.0835.
Currently, the EUR/USD pair looks quite overpriced after such a long bearish decline and if bullish recovery is expressed above 1.0870, further bullish advancement would be expected towards 1.0910 then 1.0950.
Intraday traders are advised to look for signs of bullish recovery around the current price levels of (1.0830) as a valid intraday BUY signal aiming towards 1.0910 (the nearest broken demand-level).
On the other hand, bearish persistence below 1.0830 may enable more bearish decline towards 1.0805 even down to 1.0755.
The material has been provided by InstaForex Company – www.instaforex.com