The pair 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 in January 1997). Bullish recovery was observed shortly after.
April's candlestick came as bullish engulfing one. However, the next monthly candlesticks (May, June, July, and August) reflected the recent bearish rejection that took place around 1.1450.
In the long term, a projection target will be still located at 0.9450 if a bearish breakout of the monthly demand level at 1.0550 occurs soon.
On the other hand, a bullish corrective movement towards 1.1500 will take place only if a high of 1.1465 gets breached.
This can be achieved if the current monthly candlestick closes above the weekly high (1.1465) by the end of the current month.
Recently, evident bullish recovery was expressed after hitting the level of 1.0800. Since then, bulls have been trying to achieve an extensive bullish movement towards 1.1500 and 1.1700.
Multiple ascending bottoms were established around the levels of 1.0830 and 1.1020. These levels corresponded to the current daily uptrend depicted on the chart.
Extensive bullish pressure was applied until bearish resistance was expressed around the level of 1.1700.
Recently, the market looked overbought as bulls were pushing above the price level of 1.1500 (Daily Supply Level).
Hence, a bearish movement took place towards the level of 1.1160 (61.8% Fibonacci level), which was being tested Yesterday. Bullish rejection is manifested within the recent daily candlesticks.
Daily persistence below the level of 1.1160 is mandatory to expose the next demand level around 1.0980 where the daily uptrend comes to meet the pair.
Conservative traders should wait for a bearish pullback towards the price zone of 1.0980-1.1000 (the depicted uptrend line) for a valid buy entry. S/L should be placed below 1.0950. T/P levels should be placed at 1.1080 and 1.1160.
The material has been provided by InstaForex Company – www.instaforex.com