EURUSD Intraday Technical Analysis and Recommendations for Jan. 31 by Instaforex

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EURUSD

EUR/USD was moving downwards within the marked BLUE channel when it managed to make a bullish breakdown.

The retracement is quite strong which can be considered a threat for the bears in case it continues the same movement.

Yesterday the EUR/USD pair was testing the price level 1.3232 corresponding to 38.2% of Fibonacci level which held the price below acting as intraday resistance which is expected to be retested again today.

It is necessary to mention that we have a stronger resistance level located around 1.3560-1.3600 which is equal to 61.8% according to Fibonacci and the upper limit of a previous WEEKLY supply zone.

The bearish rejection of Fibonacci level 38.2% is obvious on the 4H chart. However, the bullish pressure seems to be quite strong pushing the pair to the upside movement and apparently retesting it.

The pair seems to be forming a Head & Shoulders reversal pattern which is confirmed by closing below the neckline at the 1.3070 level with the full target at level 1.2925.

The previous 4H candlestick is bullish so the situation remains controversial as the Price Action should be bearish in this area which is supposed to be the right shoulder of the expected reversal pattern.

This pattern will be reversed if the EUR/USD pair manages to break down and close higher than the 1.3232 level (38.2% of Fibonacci) which will open the way for 1.3400 corresponding to 50% Fibonacci level.