The market was pushed lower after breaking below the major demand levels around 1.2100 and 1.2000 where historical bottoms were previously established back in July 2012 and June 2010.
The EUR/USD pair lost almost 1,500 pips since the beginning of 2015. Moreover, EUR/USD bears have already pushed the market slightly below the monthly demand level at 1.0550 (established on January 1997).
The previous monthly closure had a negative impact on the EUR/USD pair. However, April's monthly candlestick came as a bullish engulfing candle.
This may hinder further bearish decline for some time. On the other hand, it may enhance a short-term bullish corrective movement towards 1.1350 initially.
In the long term, bearish breakdown of the monthly demand level of 1.0550 should not be excluded as the long-term breakout target is roughly projected towards the level of 0.9450.
The obvious bearish breakout of the weekly demand level at 1.1100 enhanced the bearish side of the market exposing lower targets.
Full projection targets of the Flag pattern were successfully reached at 1.0800 and 1.0500.
After such a long bearish rally (which started around the levels of 1.1300), bullish rejection was expressed at 1.0570 (monthly demand level).
The price zone between 1.0750 and 1.0800 failed to neutralize the ongoing bullish momentum. Instead of it, an ascending bottom was established around the level of 1.0750.
This applied a strong bullish pressure to the level of 1.1050, exposing the DAILY supply zone at 1.1150-1.1240 where bearish rejection was expressed by the end of last week.
The current daily candlestick closure should be considered for further price analysis. Daily closure below 1.1110 pauses the ongoing bullish momentum in the short term.
Note that the nearest DEMAND levels of the EUR/USD pair are located at 1.1050 and 1.1000.
The material has been provided by InstaForex Company – www.instaforex.com