FX.co ★ Intraday technical levels and trading recommendations on EUR/USD for October 22, 2014

Last week, the EUR/USD pair looked oversold and was trading beyond the lower limit of the channel before the bullish momentum could get it back inside the channel.

That's why, price action around 1.2580-1.2600 (the lower limit of the channel) was important to determine the next destination.

Bullish recovery was expressed off 1.2500 and 1.2600 to push towards 1.2700 and 1.2830 (back inside the channel).

The origin of the bullish engulfing pattern (around 1.2600) provided a good BUY position as suggested in previous articles.

The upper limit of the movement channel (1.2880-1.2900) was being targeted this week. However, bearish pressure was applied earlier around 1.2800-1.2840.

A valid BUY position was previously suggested around the neckline of the bullish Head and Shoulders pattern (price level of 1.2660). 

Yesterday, the market expressed quite strong bearish momentum that pushed below the lower limit of the channel. 

The bears are now pushing towards price zone of 1.2600-1.2620 ( projection target of the double-top pattern ). Around this price zone, bullish recovery should be anticipated.

Recommendation:

Break below Price zone of 1.2730-1.2760 ( the lower limit of the 4H channel ) indicated a SELL position as suggested in Yesterday's article. It's running in profits now.

Another SELL entry may be anticipated around 1.2730 at retesting which should be happening soon. Stop Loss for both positions should be set at 1.2780.