Last week, the EUR/USD pair expressed massive bullish price action after hiting the previously mentioned demand zone extending between 1.2750-1.2820.
This demand zone corresponds to a previous low established in March as well as another bottom established in May, this pushed the pair to trade again above the depicted broken uptrend line.
It was expected for the pair to gain some recovery off this support zone that pushed towards 1.3000, which was bypassed towards 1.3110 then 1.3200.
It is important to note that daily closure below 1.3050 enhances the bearish view and supports resuming the ongoing bearish movement. Otherwise, the way towards 1.3225 remains open for further re-testing supported by the daily closure we had Yesterday above 1.3100.
Importance of 1.3050-1.3100 is manifested on the 4H chart as it corresponded to SMA 100 and previous congestion zone, indecision around this zone forced the pair to establish a consolidation triangle which was broken to the upside confirming the breakout opportunity with target at 1.3230.
After the pair expressed bullish breakout off this depicted triangle pattern, Price level 1.3180 provided significant supply for the pair hindering further bullish progression, this lead to trapping of the pair within another consolidation range 1.3060-1.3180.
4H closure below 1.3060 opens the way towards the recent lows around 1.2880 initially. Otherwise, breakthrough above 1.3180 opens the way directly towards 1.3225 then 1.3280 (projection target) where price action should be watched carefully.
Fundamentally, European shares suffered losses on Friday, traders said this goes back to China's decision to work on reforms regarding interest rate having a positive impact on the Chinese economy.
