Obvious bearish rejection was expressed at 1.3850 thus the pair failed to reach 100% Fibonacci Expansion at 1.3904. Instead, a strong bearish impulse was expressed to reach 1.3520 then 1.3475.

Recently, the pair expressed a false breakdown of the demand zone of 1.3550-1.3500 (long-term uptrend line). This opened the way directly towards 1.3475 which pushed the pair above 1.3550-1.3600 to consolidate again above the uptrend line depicted on the chart.

The nearest SUPPLY level is located at 1.3735 which corresponds to a previous top. On the other hand, the nearest DEMAND level is located around 1.3450.

It is noted that the weak pace of growth and increasing inflation can push the ECB to conduct monetary facilities. However, there is a desire to apply initial support which may be enough to start selling on the EUR/USD amid continuous recovery in the euro area.

As we can see in the chart, bulls pushed towards the price levels around 1.3737 where strong bearish rejection was expressed.

As expected, a corrective bearish movement towards 1.3500 took place shortly after.

The price zone of 1.3525-1.3500 failed to provide enough support for the pair opening the way towards 1.3475 where a considerable support was provided.

Re-fixation above 1.3525-1.3500 gathered bullish momentum to push the pair towards 1.3600 (50% Fibonacci) again, then 1.3635 (61.8% Fibonacci) which corresponds to the upper limit of the ongoing bearish channel.

Price zone 1.3600-1.3630 will probably provide a valid SELL entry with SL as 4H closure above 1.3680.