FX.co ★ Intraday technical levels and trading recommendations on EUR/USD for October 1, 2014

Around price zone of 1.3800-1.3880 (dotted on the chart), the market initiated the current downtrend within the depicted bearish channel.

Several congestion zones were established around the price levels of 1.3515 and 1.3335 before further bearish decline could take place.

Two weeks ago, the pair showed bullish recovery around price level of 1.2860. However, the following bearish engulfing daily candlestick indicated severe weakness of the bulls. This enhanced further bearish decline towards 1.2750, 1.2680 and 1.2570.

The daily chart reveals Overselling action of the EUR/USD pair. The bears managed to achieve temporary breakdown of the lower limit of the bearish channel.

Today's daily candlestick should be monitored for bullish rejection. Any signs of bullish reversal should indicate upcoming corrective movement towards 1.3060. 

The current short-term bearish trend remains intact as long as bears keep defending the price zone around 1.2995 (the recent weekly high). Moreover, another descending high was established on Wednesday around 1.2920.

The bearish slide below 1.2820 invalidated the possibility of a short-term bullish reversal.

Careful watching of price action around the current price levels is essential to determine the next destination of the EUR/USD pair.

In case the bulls initiate a corrective movement around the lower limit of the channel being breached today, the first target levels to be visited should be located around 1.2940 and 1.3060 where the upper limit of the channel and a significant Fibonacci level are located.