FX.co ★ Intraday technical levels and trading recommendations on EUR/USD for August 5, 2014

The price zone of 1.3800-1.3880 (dotted on the chart) provided considerable SUPPLY for the EUR/USD pair. This price zone managed to pause the bullish momentum leading to obvious breakdown of the depicted bullish trend line.

Prominent bullish engulfing daily candlesticks emerged off 1.3500 (the lower limit of the ongoing channel). On the other hand, this bullish swing was contained below price zone of 1.3640-1.3660.

Bearish pressure which originated off 1.3650 has applied enough pressure on price level of 1.3560 (corresponding to the previous prominent bottom) exposing price levels around 1.3360 where bullish recovery was witnessed last week.

Note that Bullish fixation above 1.3440 is essential to acquire momentum strong enough to initiate a bullish corrective move towards 1.3530.   

Breakdown of 1.3500 invalidated the bullish structure allowing the bears to pursue towards the price level of 1.3420 (Fibonacci Expansion 100%).

The bears have failed to fixate below 1.3400 on a daily basis. That's why, Bullish pressure was originated off 1.3370. However, the long-term bearish trend remains intact as long as the bears keep defending price zone of 1.3530-1.3550.

The bulls should be conservative with their long positions as the bearish trend could be resumed anytime towards 1.3360 (where 127.2% Fibonacci Expansion level is located). 

On the other hand, bullish fixation above 1.3430 ensures a deeper bullish correction towards 1.3520 and 1.3550 where bearish rejection is anticipated to resume the ongoing trend.