The EUR/USD pair broke down demand zone around 1.3000 after the significant decline witnessed at retesting of 1.3400 ( downtrend line ) which took place on June 19.
On Friday, the pair expressed significant price action, as the pair expressed false breakout above high of last Thursday's daily candlestick which enhances the bearish pressure further below 1.3000 where support levels are located at 1.2930-1.2900.
The most prominent supply zones are located around 1.3070 then 1.3100 which expressed significant price action that lead to bearish engulfing daily candlestick witnessed on Monday.
Now we have obvious daily closure below Key-Level of 1.3000 which puts further bearish pressure on the market.
Price area 1.2900 ( daily uptrend line ) being tested today may provide temporary support for the pair. Hence, we have to watch price action carefully there.
On the 4H chart, we can see the importance of 1.3000 level as it corresponded to the lower limit of the depicted consolidation triangle.
Also we can see the pair fixated below previous demand zone 1.2950-1.3000, now acting as supply one.
The breakdown below the depicted uptrend line also represented bearish breakout off the consolidation range ( 1.2985 – 1.3090 ) opens the way down to 1.2890 as a projection target then possibly 1.2850.
Fundamentally, The European Central Bank kept interest rates at their lowest levels during the month of July, amid demands to support the fragile growth of the region as explained in the report issued by the European Central Bank today. This may add further bearish pressure on the pair to achieve lower lows.
Suggested Trades :
At Price Level 1.3020-1.3070, a valid SELL deal was recommended with TP at 1.2930 which got hit earlier today.
Another valid SELL entry may be taken at 1.2950 at retesting with SL located above 1.3000.