EUR/USD Testing Important Resistance

Daily: The EUR/USD pair was on the verge of continuing a decline but the 1.2150 proved to be support again. That was expected, but the rally from there is a new clue that the consolidation/correction is to extend.

This also opens the possibility of a reversal. The 1.2150 low established after yesterday's candle, is higher than the 1.1880 low earlier this month.

The market is about to test the 1.26 resistance. This is an important one as it is the neckline of a reverse head and shoulder that is forming.

A break above suggests the market can rally towards 1.31 powerline (resistance), or the 1.30 (61.8% retracement) level.

The scenario above is a Gartley (AB=CD retracement pattern), suggesting even if the market breaks 1.26, we may see some resistance below 1.28 (50% retracement area).

Therefore, I will be stalking the rally to see if, first of all, the current resistance holds at 1.26. Then if it does not I want to see a throwback. I would expect this throwback to start near the end of the Gartley projection, 1.2750, 1.28.