FX.co ★ Intraday technical levels and trading recommendations on EUR/USD for December 2, 2014

The price zone of 1.2880-1.2900 ( corresponding to the upper limit of the previous broken channel ) was being targeted one month ago. However, bearish pressure was applied earlier around 1.2800-1.2840 where the depicted head and shoulders reversal pattern was established.

A bearish breakout off the bullish channel took place shortly after, thus confirming a Flag continuation pattern. Bearish projection target was already reached around 1.2490.

Daily fixation below 1.2490-1.2500 (the origin of the previous bullish swing expressed one month ago) theoretically extends the bearish targets towards the price level of 1.2200.

As we mentioned, the EUR/USD bears needed to obviously fixate below 1.2490 soon enough ( took place already two weeks ago ).

As anticipated during the past two weeks, the bears have been defending the price zone of 1.2470-1.2490 as their recent SUPPLY zone.  

Price level of 1.2200 corresponds to the projection target of the current bearish flag pattern. as long as 1.2490 remains unbroken. 

Few ascending bottoms around 1.2400 and 1.243 were established. This applied temporary bullish pressure that's why, the EUR/USD pair managed to fixate above price level of 1.2500 for a few 4H candlesticks before the bears managed to apply enough bearish pressure.

The bearish flag scenario should now be considered for the longer-term positions. Bears should be looking for a solid SUPPLY ZONE to SHORT the EUR/USD pair around ( review Trade recommendations below ).

A double-top pattern is now manifested on the 4H chart. Fixation below neckline ( price level of 1.2430 ) ensures bearish tendency of the market.

On the other hand, the EUR/USD pair has a bearish projection target ( the Flag pattern ) roughly located around price levels of 1.2200.

Trade recommendations:

Price zone of 1.2470-1.2490 was considered for SELLING the pair. This price zone corresponds to a previous swing low ( established on October 6) as well as significant Fibonacci level of the most recent bearish impulse.

Stop Loss should be located above 1.2575. Target levels should be set at 1.2430, 1.2360 initially and price zone of 1.2250-1.2200 to be watched next.

Intraday traders can SHORT the pair around 1.2430-1.2450 at retesting. SL should be set as four-hour closure above 1.2480 ( previous entry levels ). TP levels are the same.