FX.co ★ Intraday technical levels and trading recommendations for EUR/USD for February 7, 2014

A breakout above the previous resistance level of 1.3450 allowed bulls to hit higher levels around 1.3650, and then 1.3750.

Later on, obvious bearish rejection was expressed at 1.3850 (failing to reach 100% Fibonacci Expansion at 1.3904).Instead, a strong bearish impulse was expressed which reached 1.3520 then 1.3475.

Last week, the pair expressed another bearish breakdown of the demand zone of 1.3550-1.3500 (long-term uptrend line). This opened the way directly towards 1.3475 that was hit on Monday.

It is worth mentioning that the ECB is looking to facilitate monetary easing in the face of rising rates of deflation. Moreover, it comes at a time when Draghi "President of the ECB" is looking forward to reducing the value of the EURO to give more autonomy to the EMU.

It is noted that the weak pace of growth and rising inflation could push the ECB to conduct monetary facilities. However, there is a desire to apply initial support which may be enough to start selling on the EUR/USD amid continuous recovery in the EURO zone.

As we can see in the chart, bulls pushed towards the price levels around 1.3737 recently where strong bearish rejection was expressed.

As expected, a corrective bearish movement towards 1.3525-1.3500 took place shortly after.

The price zone of 1.3525-1.3500 failed to provide enough support for the pair opening the way towards 1.3475 where a bullish move was initiated.

Re-Fixation above 1.3525-1.3500 gathered bullish momentum to push towards 1.3600 (50% Fibonacci) again then 1.3635 (61.8% Fibonacci).

Price Zone 1.3600-1.3630 will probaboly provide a valid SELL entry with SL as 4H closure above 1.3680.