FX.co ★ EUR/USD Intraday Technical Analysis & Trade Recommendations January 20, 2012

Yesterday, EUR/USD managed to break and close above the consolidation range upper limit at 1.2880.

Last Friday EUR/USD recorded a low at 1.2623 further below the consolidation zone lower limit. However, it came back inside the range immediately.

Yesterday EUR/USD managed to break and close above the upper limit of the long-term bearish channel established in last October. However, this isn't considered a valid bullish entry as the pair has a considerable resistance area at 1.2890-1.2970, which is a 61.8% Fibonacci level, and also the previous broken daily lows.

Now the pair is testing the upper limit of the SUPPLY zone at 1.2970 which is key-level for today's movement.

Bearish price action towards this resistance area 1.2890-1.2970 gives the opportunity to SHORT the pair with SL placed above 1.3000.

However, its break will open the way directly to 1.3075 which, if broken too, will reach up to 1.3190, these moves, if happened, can be profitable for intraday traders.

The current midterm bearish direction and trend of the pair, beside the bearish WEEKLY closure last week, enhances the bearish side of the market.

It's important to mention that the pair has a good support around 1.2600-1.2585, which is a significant previous weekly low.