A bullish breakout above the previous consolidation zone between 1.2400 and 1.2800 was performed on July 15 (shown on the weekly chart).
A significant bearish rejection was observed around 1.3450. Hence, another consolidation range was established from 1.3450 down to 1.2800.
On December 7, a bullish breakout above 1.3450 (the upper limit of the recent consolidation range) enhanced the bullish side of the market. Hence, a bullish visit to the resistance level of 1.4120 (Fibonacci Expansion 100%) was executed.
Bullish persistence above 1.4150 enhanced the bullish side of the market towards 1.4650 (141.4% Fibonacci expansion) where an evident bearish rejection was expected (bearish engulfing weekly candlestick).
The level of 1.4120 (Fibonacci Expansion 100%) remains a significant key level to be watched for further price reactions.
On the other hand, the current price zone of 1.3180-1.3250 stands as a significant support zone to be watched for a valid buy entry.
The price zone of 1.3200-1.3250 corresponds to the depicted weekly uptrend line and the upper limit of the previous consolidation range (prominent breakout level).
Hence, the current signs of bullish rejection around this price zone should be considered a valid buy signal.
Trading Recommendation:
Conservative traders were advised to look for a valid bullish entry around the current price zone of 1.3200-1.3250. It is currently running in profits.
S/L should be located below 1.3150. Initial T/P levels should be located at 1.3400, 1.3500, and 1.3640.
