The price zone of 1.2880-1.2900 (corresponding to the upper limit of the previous broken channel) was being targeted a month ago. However, bearish pressure was applied earlier around 1.2800-1.2840 where the depicted head and shoulders reversal pattern was established.
A bearish breakout off the bullish channel took place shortly after, thus confirming a Flag continuation pattern. Bearish projection target was already reached around 1.2490.
Daily fixation below 1.2490-1.2500 (the origin of the previous bullish swing expressed one month ago) theoretically extends the bearish targets towards the price level of 1.2200.
As we mentioned, the EUR/USD bears needed to obviously fixate below 1.2490 soon enough. This has already taken place two weeks ago.
As anticipated during the past two weeks, the bears have been defending the price zone of 1.2470-1.2490 and recently price level of 1.2400-1.2445 as their recent SUPPLY levels.
Price level of 1.2200 corresponds to the projection target of the current bearish flag pattern as long as 1.2450 remains unbroken.
The bearish flag scenario should now be considered for the longer-term positions. Bears should be looking for a solid SUPPLY ZONE to SHORT the EUR/USD pair around (review Trade recommendations below).
A double-top pattern was expressed this week on the 4H chart around 1.2500. As anticipated, fixation below neckline ( price level of 1.2430 ) enhanced the bearish tendency of the market.
Moreover, the EUR/USD pair has a bearish projection target (the Flag pattern) roughly located around price levels of 1.2200.
Fixation below recent SUPPLY levels around 1.2400 - 1.2430 ( significant Fibonacci Levels ) is mandatory to maintain the current bearish momentum towards 1.2200.
Trade recommendations:
The Stop Loss for the previously mentioned SELL position around 1.2470 should be lowered to 1.2460 to offside the risk after taking some profits.
Target levels should be set at 1.2430, 1.2360 initially and price zone of 1.2250-1.2200 to be watched next.
As mentioned Yesterday, Intraday traders can SHORT the pair around price zone of 1.2420-1.2445. SL should be set as four-hour closure above 1.2470.