Daily view:
Price Zone 1.3515-1.3560 represents a valuable Supply zone that kept price below for almost two months. The pair is showing some bearish rejection manifested in the Daily candlesticks of previous week as well as last Monday's bearish engulfing candlestick. However, lack of bearish follow-up is witnessed since last Friday.
Looking at the daily candlestick of Friday, the bulls reached 1.3565 then failed to stabilize there. Instead, daily closure took place at 1.3520 rendering price level 1.3565 a valuable supply level to be watched.
Bearish retracement movement is expected after breakdown of Friday's low at 1.3470 to push the pair towards 1.3430 then 1.3375.
Another probability that may happen if the pair expresses daily closure above 1.3495 there is another bullish swing towards 1.3590-1.3600, provided that the bulls manage to break above 1.3560.
4H View:
A double-top pattern with the neck-line at 1.3465 was invalidated on Friday when the bulls managed to have 4H closure above 1.3515 (back again inside the broken channel).
Fixation above 1.3515 invalidates this bearish view mentioned above opening the way towards 1.3590-1.3600 in the short-term prospect.
Fundamentally, European business activity rises in the third quarter from the previous three months according to private sector report released on Thursday. Moreover, optimism about the euro zone's economy brightened for the fifth month hiting a 2-year high in September, adding to the evidence that recovery is underway.
