FX.co ★ EUR/USD intraday technical levels and trading recommendations for September 5, 2013

The EUR/USD pair has been finding solid Supply around 1.3400. The previous weekly candlestick had a small bullish body representing failure of the bulls to close above the high of the preceding weekly candlestick at 1.3380, which applied bearish pressure again in the pair during last week, despite the bullish closure of the previous weekly candlesticks.

Last week, the EUR/USD pair manages to have a bearish engulfing Weekly candlestick, which was formed by the strong bearish momentum witnessed especially on Thursday supported by the fundamental data about inflation data in Germany representing deterioration.

The price level of 1.3180 (previous week's low) was visited quickly where the SMA-100 comes to meet the pair roughly.

As depicted in the chart, Monday's daily candlestick remains an inside bar, the low of which has been broken down on Tuesday. However, the daily closure (long lower shadow) represents lack of bearish momentum with this daily closure around 1.3170 level.

European markets opened higher during today's trading session ahead of the announcement of the final decision by the European Central Bank and the Bank of England. Analysts at Bank Danske declared that "today, the main event is the ECB meeting in the afternoon, and from their point of view there will be some discussion about reducing interest rates , more than the previous month, due to sudden rise of the economic indicators and decline in the pace of excess liquidity.

The euro gained some steadiness against the U.S. dollar after the release of the disappointing U.S. trade balance data Yesterday, which renewed concerns related to the probability of the existence of a military strike by the United States on Syria.

Technically, the broken bullish channel led to price decline towards 1.3170 which is the nearest demand level to meet the pair. That is why, fixating below it will probably bring bearish pressure to the market towards the next demand level located around 1.3060. However, the pair has a higher probability to achieve further recovery off 1.3170 as long as the current low at 1.3140 remains unbroken.

Price levels of 1.3230 then 1.3290 would be appropriate targets for a possible retracement.