Strong bullish sentiment was found at the support zone around 1.4830, which pushed the pair to the upside reaching 1.5400, then 1.5700, where two prominent tops were established.

The uptrend line around 1.5430-1.5400 applied bullish pressure on the pair, which was able to break through 1.5720, which corresponds to the August highest level and the recently established top.

The market expressed obvious closure above 1.5575, which invalidated the previously mentioned H&S reversal pattern. This opened the way towards 1.6000, 1.6170, then 1.6260.

It is important to note that the market expressed bearish rejection off 1.6150-1.6200, which resulted in an inverted hammer WEEKLY candlestick. That is why, a bearish movement was expected to take place during last week provided that the bears remain defending the weekly high at 1.6150. However, lack of bearish momentum enhanced by the weakness of the USD allowed the bulls to step above 1.6200 (127.2% Fibo Expansion) for a short time until bearish domination came back into the market.

The pair probably established a Head-and-Shoulders reversal pattern, where the right shoulder is located around 1.6120, which is 50 pips lower than the expected levels of 1.6160-1.6175, thus providing a valid SELL entry on breakdown of 1.5950 ( neck-line) with SL located above 1.6130. Take care that the pair expressed bullish hammer daily candlesticks after visiting 1.5915 on Thursday indicating lack of bearish follow up at the current time.

Failure to break down and fixation above the price level of 1.5950 opens the way back towards 1.6160-1.6175. However, the early breakdown of 1.5950 will enable the bears to initiate a bearish swing towards 1.5900, then 1.5800 probably.