Strong bullish sentiment was found at the support zone around 1.4830, which pushed the pair to the upside reaching 1.5400, then 1.5700, where two prominent tops were established.
The uptrend line around 1.5430-1.5400 applied bullish pressure on the pair which managed to break through 1.5720, thus matching the August highest level and the recently established top.
The market expressed obvious closure above 1.5575 which invalidated the previously mentioned H&S reversal pattern. This opened the way towards 1.6000, 1.6170, then 1.6260.
It is important to note that the market expressed bearish rejection off 1.6150-1.6200 which resulted in an inverted hammer weekly candlestick. That is why a bearish movement was expected to take place during the last week provided that the bears continue defending the weekly high at 1.6150. However, the lack of bearish momentum enhanced by the weakness of USD allowed the bulls to step above 1.6200 (127.2% Fibo Expansion) for a short time until bearish domination came back into the market.
Yesterday, there was a failure to break down the level of 1.6110. Instead, the fixation above the price level of 1.6100 opened the way back towards 1.6200 again corresponding to the depicted Fibonacci Expansion level establishing a narrow congestion zone.
The pair probably established a Head-and-Shoulders reversal pattern, where the right shoulder is located around 1.6180-1.6200, thus providing a valid sell entry either on retesting or after the breakdown of 1.6100 (neck-line) with SL located above 1.6250.
On the other hand, daily closure above 1.6200 will enable the pair to achieve higher bullish targets around 1.6280 (141.4% Fibo Expansion) initially.
