A breakout above the previous resistance level of 1.3450 allowed bulls to higher levels around 1.3650, and then 1.3750 within the bullish channel.
Later on, obvious bearish rejection was expressed at 1.3850 (failing to reach 100% Fibonacci Expansion at 1.3904). Instead, a breakdown of the lower limit of the depicted bullish channel took place on January 2. This led to the previous bearish impulse that almost reached 1.3520.
Last week, the pair expressed another bearish breakdown of the demand zone of 1.3550-1.3500 (long-term uptrend line as well as SMA-100). This opened the way directly towards 1.3475 that was hit on Monday. Any further bearish impulses will probably be targeting at 1.3455 (prominent Daily Support).
It is worth mentioning that the ECB is looking to facilitate monetary easing in the face of rising rates of deflation. Moreover, it comes at a time when Draghi "President of the ECB" is looking forward to reducing the value of the EURO to give more autonomy to the EMU .
As we can see in the chart, bulls pushed towards the price levels around 1.3737 recently where strong bearish rejection was expressed.
As expected, a corrective bearish movement towards 1.3525-1.3500 took place shortly after.
The price zone of 1.3525-1.3500 failed to provide enough support for the pair. Instead, the pair has established a supply zone around the same price levels.
It is noted that the weak pace of growth and rising inflation could push the ECB to conduct monetary facilities. However, there is a desire to apply initial support which may be enough to start selling on the EUR/USD amid continuous recovery in the EURO zone.
Fixation below 1.3525-1.3500 will gather further bearish momentum to push towards 1.3450 again then 1.3400 possibly.