The price zone of 1.3560-1.3600 represented a valuable supply zone that kept the price below for almost two months. However, lack of bearish follow-up was witnessed around 1.3480. Instead, a significant bullish rejection was expressed leading to a Flag continuation pattern.
According to the final readings of the European Statistical Office one week ago, the European inflation was 1.1% in September, in line with preliminary projections, it settled at 1.3% in August. This constituted to the recent bullish jump that took place on October 22.
Previous daily candlesticks represented indecision around 1.3800 strongly suggesting bearish retracement towards 1.3700 the 1.3650 which took place shortly after.
The price zone extending between 1.3550-1.3460 is now considered a valuable supply zone. This zone failed to provide a strong support. Instead, bearish breakdown took place last week with a quite strong momentum leading to breakdown of 1.3400 as well.
Persistence of the current breakdown below 1.3400-1.3450 will lead to the next support level around 1.3230 where price action should be watched. Otherwise, bullish reversal may take place to visit again the upper limit of the SUPPLY zone around 1.3555 then possibly 1.3625.
