Since Mid-November, Successive Lower Highs were observed below the depicted H4 downtrend line around the price levels of 1.2870 and 1.2780.
Shortly after, there was a quick bearish decline towards the price level of 1.2500 before bullish recovery took place on December 12.
A bullish Head & Shoulders pattern is being demonstrated on the H4 chart with a 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.
Yesterday's price movement demonstrates the recent bullish breakout above the depicted downtrend line. This enhances the bullish side of the market as well.
Please remember that the current bullish movement towards the price zone of 1.2680-1.2700 should be monitored as this price zone corresponds to the backside of the broken consolidation range.
On the other hand, the current scenario may pursue as a bearish flag pattern provided that bearish persistence below 1.2660 (corresponding to a prominent daily low) is maintained on a daily basis. Projected target for the bearish flag pattern would be located around 1.2300.