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, the EUR/USD bears have already pushed the market slightly below the monthly demand level of 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 as depicted on the chart.
In the long term, bearish breakdown of the monthly demand level at 1.0550 should not be excluded as the long-term breakout target is roughly projected towards the level of 0.9450.
Meanwhile, a further bearish decline can be hindered for a few weeks.
On the other hand, a bullish corrective movement towards 1.1500 and 1.1600 is still probable especially if intraday demand zone (1.1150-1.1100) remains defended by bulls.
The obvious bearish breakout of the weekly demand level at 1.1100 allowed the market to fall dramatically shortly afterwards.
After such a long bearish rally (which started around the levels of 1.1300), bullish rejection was expressed at 1.0570 (monthly demand level).
A bullish continuation pattern with an ascending bottom was established around the level of 1.0650.
That is why, bears failed to hinder the ongoing bullish momentum around the key zone of 1.1150-1.1050 on April 29. Temporal bullish fixation above 1.1100 took place shortly after.
Further bullish advancement was enhanced by the multiple daily closures above the levels of 1.1150 and 1.1250 until bearish pressure was applied around 1.1450 (just below the depicted supply level of 1.1500).
This week, bearish pullback is taking place towards 1.0800 -1.0830 where a valid buy entry can be offered.
The material has been provided by InstaForex Company - www.instaforex.com