FX.co ★ EUR/USD intraday technical levels and trading recommendations for September 20, 2013

Immediate bullish pressure was expressed on testing the depicted uptrend line around 1.3100 resulting in a bullish engulfing daily candlestick that closed above 1.3170.

This was followed by a full-body bullish daily candlestick representing accelerated momentum that pushed towards 1.3275 reaching 1.3315-1.3330 last week before the weekly bullish gap took place.

Price Zone 1.3330-1.3350 was prominent SUPPLY zone for the EUR/USD pair. However, the bullish gap turned it into a prominent demand zone to be watched for bullish price action.

Price Zone 1.3515-1.3560 represents a valuable Supply zone that kept price below for almost two months. Since the pair is showing some bearish rejection, a retracement movement towards 1.3430 is not excluded.

Bullish rejection off 1.3100 is obvious on the 4H chart. Narrow consolidation ranges were established between 1.3240-1.3280 then between 1.3280-1.3300 until bullish breakout took place during the week-end resulting in the opening gap around 1.3360.

The EUR/USD is showing overbought state after the prominent bullish move witnessed this week especially on Wednesday. There is a possible Head and shoulders reversal pattern to be targeting 1.3450 then 1.3400 if the price is maintained below the recent high at 1.3570.

The importance of price level 1.3400 is apparent on the 4H chart being a previous SUPPLY zone that has pushed the pair 300 pips to the downside recently. The pair may find immediate buying pressure at retesting.