FX.co ★ EUR/USD intraday technical & fundamental review for May 2, 2013

On the daily chart, the EUR/USD pair pursues the continuation of the Flag pattern after the bullish impulse was initiated at 1.2750 on April 4th.

A breakthrough above 1.3100 took place on Tuesday which confirmed the pattern to have final projection target at 1.3400. However, an important supply zone is located at 1.3190-1.3200 that was established on April 16.

This supply zone expressed some bearish presence yesterday and is manifested in the inverted hammer daily candlestick.

On the 4H chart the EUR/USD pair has been consolidating within the depicted movement channel, the upper limit of which has been broken through obviously on Tuesday.

Important support level is located around 1.3080 which constitute a prominent demand zone to be watched for price action. Retesting of which will probably provide a valid BUY entry for those who missed the initial breakout to be targetting 1.3190, 1.3250 and finally 1.3400.

Fundamentally, activity in the euro zone's manufacturing sector increased more than expected last month, according to data released today. This gives some bullish preference to the pair. That's why breakdown of 1.3145 is essential to open the way towards 1.3080.