The market was aggressively 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 has lost almost 1600 pips since the beginning of 2015. Moreover, EUR/USD bears have already pushed the market slightly below the monthly demand level around 1.0550 (established on January 1997) where bullish rejection was applied for retesting.
The recent monthly closure remains negative for the EUR/USD pair in the long term.
Bearish breakdown of the monthly demand level at 1.0550 should be anticipated as theoretical long-term targets are projected around 0.9450.
Obvious bearish breakout of the weekly demand level at 1.1100 enhanced the bearish side of the market exposing lower targets.
Full projection targets for the Flag pattern were successfully reached around 1.0800 and 1.0500.
As we anticipated, after such a long bearish rally (which started off 1.1300) bullish rejection was around 1.0570 (monthly demand level).
The daily persistence above 1.0850-1.0860 (recent uptrend line and previous demand level) is mandatory to maintain the bullish corrective movement towards 1.1100 where a long-term sell position can be offered.
On the other hand, in case of fixation below the level of 1.0850 (currently being tested), the EUR/USD pair is likely to move back towards 1.0650-1.0600 (weekly low).
The material has been provided by InstaForex Company - www.instaforex.com
