Since mid-November, successive lower highs were demonstrated below the depicted H4 downtrend line around the price levels of 1.2870 and 1.2780.
Shortly after, a quick decline was demonstrated towards the price level of 1.2500 before bullish recovery could take place on December 12.
A bullish Head & Shoulders pattern is being demonstrated on the H4 chart with neckline located around 1.2660-1.2680. Bullish persistence above 1.2660-1.2680 is mandatory for confirmation. Pattern confirmation projects a bullish target towards 1.2880 again.
Today's price action demonstrates recent bullish breakout above the depicted downtrend line. This enhances the bullish side of the market as well.
On the other hand, the current scenario may pursue as a bearish flag continuation pattern provided that bearish persistence below 1.2660 (corresponding to a prominent daily low) is maintained on a daily basis. The projected target for the bearish flag pattern is located around 1.2300
Please take into consideration that the current bullish movement towards the price zone of 1.2680-1.2700 should be watched cautiously for price action as this price zone corresponds to the backside of the broken consolidation range.