Back in June 24, the EURUSD looked overbought around 1.1400 facing a confluence of supply levels.
In the period between 8 – 22 July, sideway consolidation-range was established between 1.1200 – 1.1275 until a triple-top reversal pattern was demonstrated around the upper limit.
Shortly after, evident bearish momentum (bearish engulfing H4 candlestick) could bring the EURUSD back below 1.1175.
This facilitated further bearish decline towards 1.1115 (Previous Weekly Low) where temporary bullish rejection was demonstrated before bearish breakdown could take place on July 31.
On July 31, Temporary Bearish breakdown below 1.1115 allowed further bearish decline towards 1.1025 (lower limit of the depicted recent bearish channel) where significant signs of bullish recovery were demonstrated.
Risky traders were advised to look for bullish persistence above 1.1050 as a bullish signal for Intraday BUY entry with bullish target projected towards 1.1115, 1.1175 and 1.1235.
During the past week, the depicted Key-Zone around 1.1235 has been standing as a prominent Supply Area where TWO Bearish Engulfing H4 candlesticks were demonstrated.
Earlier this week, another bullish visit was demonstrated towards 1.1235 where another episode of bearish rejection was anticipated.
Thus, the EUR/USD was trapped between 1.1235-1.1175 for a few trading sessions until bearish breakout below 1.1175 occurred on August 14.
Bearish persistence below 1.1175 promoted further bearish decline towards 1.1075 where the backside of the broken bearish channel is located.
Currently, Significant bullish recovery sign is being manifested on the chart (A Bullish Engulfing H4 candlestick).
A quick bullish breakout above 1.1115 is needed to confirm the short-term trend reversal into bullish. This would enhance further bullish advancement towards 1.1175.
Trade recommendations :
Conservative traders can have a valid BUY entry anywhere around 1.1070 (where the backside of the broken bearish channel is located).
S/L should be placed just below 1.1020 while initial T/P levels should be located around 1.1130, 1.1175 and 1.1200.