FX.co ★ Intraday technical levels and trading recommendations on EUR/USD for July 29, 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 that originated off the depicted bullish trend line.

Previous prominent bullish engulfing daily candlesticks emerged off 1.3500 (the lower limit of the ongoing channel) thus fixating again above 1.3560 (the key level corresponding to the previous prominent bottom).

Later on, the EUR/USD pair has been facing difficulty to fixate above the key level around 1.3640-1.3660, then successive bearish engulfing candlesticks originated off this price zone.

Bearish pressure which originated off 1.3650 has applied enough pressure on 1.3560 (corresponding to previous prominent bottom) exposing 1.3500 which was broken down shortly after.

Note that Bullish fixation above 1.3480 - 1.3500 is essential to recover and acquire momentum strong enough to initiate a bullish corrective move within the current steep bearish trend. 

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

Bullish pressure may be initiated around the current prices provided that the bears fail to fixate below 1.3400 on a daily basis.

However, the current short-term trend remains intact until proven otherwise. So, 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).