FX.co ★ EUR/USD candlestick analysis for January 18, 2011

Earlier on a 4-hour graph the EUR/USD currency pair formed the Shooting Star candlestick, which is a downside signal. At the moment the pair is rolling back after a sharp downfall. However, the viewpoint to the pair is still bearish.
This candlestick was formed amid sharp rollback of the 1.2869 level. However, the bears started increasing their influence near the resistance level 1.3497 (December 2010 high) and a rebound took place.
Breakout of the Fibonacci level 23.6 will prove this viewpoint. In this case downside movement to the support level 1.3080, where the Fibonacci correction level 61.8 is also located, should be expected.
On the other hand, if the resistance level 1.3497 is broken, short positions should be closed as it will lead to an increase up to 1.3786.