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 in January 1997). Bullish recovery was expressed shortly after.
April's monthly candlestick came as a bullish engulfing one. However, the next monthly candlesticks (May, June, July, and August) reflected that recent bearish rejection being expressed around 1.1450.
In the long term, a projection target will be still located at 0.9450 if a bearish breakdown of the monthly demand level at 1.0550 occurs soon.
On the other hand, a bullish corrective movement towards 1.1500 will be possible only if May's monthly 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 this 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 price level of 1.1700.
Recently, the market looked overbought as the bulls were pushing above the price level of 1.1500 (Daily Supply Level). That is why, a bearish movement took place towards the price level of 1.1160 (61.8% Fibonacci level) which is being breached today.
Daily persistence below the price level of 1.1160 exposes the next demand levels around 1.0980 where the daily uptrend comes to meet the pair.
Conservative traders can have a valid BUY entry anywhere around the price zone of 1.0980-1.1000 (corresponding to the depicted uptrend line).
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