The pair was moved lower after breaking below major demand levels around 1.2100 and 1.2000 where historical bottoms were previously established 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 is still seen 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.
It can be achieved if the current monthly candlestick closes above a weekly high of 1.1465 by the end of the current month.
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.
The market looked overbought as bulls were pushing further beyond the price level of 1.1500 (Daily Supply Level).
Hence, bearish movement took place towards the level of 1.1150 (61.8% Fibonacci level), which provided evident bullish rejection (note the recent daily candlesticks).
The current price zone of 1.1300-1.1330 constitutes an intraday supply level which provided bearish rejections many times before. It should be defended by bears to achieve further bearish decline.
On the other hand, daily persistence below the level of 1.1150 (61.8% Fibonacci level) 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