The pair was descending to the mentioned support level on Tuesday as a result of unexpectedly poor manufacturing orders data from Germany – the orders suddenly decreased in July. Moreover, the situation is worsened by the messages from bond fund, which says that Greece is expected to be unable to rid itself of debts in 3 years avoiding restructuring

As the price has obviously fixed below 55 MA, and the question is – what’s next?

A short term scenario would be intraday support at level 1.2745 with the following breach of a dashed line, in case inverse head-and-shoulders scenario fails.

Consolidation within the range until the market moods clear up is the alternative scenario. Head-and-shoulders variant is possible here, as well as “hanging” somewhere in between these two extremities. 

Analysis prepared by:

Maxim Dmitrievsky
Forex4you analyst