The market was pushed lower after breaking below major demand levels around 1.2100 and 1.2000 where historical bottoms were previously hit back in July 2012 and June 2010.
The EUR/USD pair has lost almost 850 pips since the beginning of 2015. Moreover, EUR/USD bears have already pushed the price slightly below the monthly demand level at 1.0550 (established on January 1997).
April's monthly candlestick came as a bullish engulfing one. However, the next monthly candlesticks (May and June) reflect recent bearish rejection being expressed around 1.1450.
In the long term, a bearish breakout of the monthly demand level at 1.0550 should not be excluded as the long-term projection target is located at 0.9450.
However, a bullish corrective movement towards 1.1500 may be executed only if May's monthly high of 1.1465 gets breached (considered a very low probability currently).
After such a long bearish rally (which started around the levels of 1.1300), bullish rejection took place at 1.0570 (monthly demand level).
Multiple ascending bottoms were established around the levels of 1.0470, 1.0550, and 1.0850. These levels corresponded to the daily uptrend depicted on the chart.
Further bullish pressure was observed until bearish rejection was applied around 1.1400 (Long-term double-top reversal pattern).
A daily closure below the level of 1.1150 brought the EUR/USD pair towards 1.1000 again where the uptrend comes to meet the EUR/USD pair (significant demand level depicted on the chart).
That is why, the current daily candlesticks should be monitored in order to clarify further direction. Bulls should keep defending their uptrend/demand zone around 1.1000-1.0950.
EUR/USD bulls must keep trading above 1.1000, so further bullish advancement can be achieved. Initial bullish target would be located at 1.1150 and 1.1300 (a prominent supply level to be watched).
On the other hand, please note that a single bearish closure below 1.0950 hinders the ongoing bullish scenario enabling a quick bearish decline towards 1.0850 and 1.0700 (projection target for the reversal pattern).
The material has been provided by InstaForex Company – www.instaforex.com