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.
EUR/USD bears have already pushed the price slightly below the monthly demand level at 1.0550 (established on January 1997). Bullish recovery was expressed shortly after.
April's monthly candlestick came as a bullish engulfing one. However, the next monthly candlesticks (May and June) reflected recent bearish rejection being expressed around 1.1450.
In the long term, a projection target is still located at 0.9450 if a bearish breakdown of the monthly demand level at 1.0550 occurs soon.
A bullish corrective movement towards 1.1500 can be possible only if May's monthly high at 1.1465 gets breached (a low probability).
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 again brought EUR/USD to the mark of 1.1000 where the uptrend met the pair.
A bearish daily closure below 1.0950 enabled a quick bearish decline towards 1.0850 and 1.0750.
Evident bullish recovery was expressed last week after hitting the level of 1.0800. Bulls have been trying to bring a bullish corrective movement towards 1.1000 and 1.1100.
Earlier, the price level of 1.1100 where the backside of the broken uptrend is located, was being approached. However, significant bearish rejection was expressed around 1.1100.
A bearish pullback is currently extending below 1.1000 after the most recent daily candlesticks were expressed (Bearish Engulfing candlestick following a Hanging-Man one).
The long-term Double-Top pattern remains valid as long as the market keeps pushing below the price level of 1.0960.
Trader Recommendations :
Risky traders can wait for a DAILY closure below the level of 1.0960 as a SELL signal.
S/L should be located above 1.1150 while T/P levels should be located at 1.0850 and 1.0700.
The material has been provided by InstaForex Company – www.instaforex.com