The market was pushed lower after breaking below the major demand levels around 1.2100 and 1.2000 where historical bottoms were previously hit back in July 2012 and June 2010.
The EUR/USD pair has lost almost 850 pips since the beginning of 2015. Moreover, EUR/USD bears have already pushed the price 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 on the chart.
In the long term, a bearish breakout of the monthly demand level at 1.0550 should not be excluded as the long-term breakout target is projected towards the level of 0.9450.
However, a bullish corrective movement towards 1.1500 and 1.1600 is still possible only if May's monthly high (1.1465) gets breached as soon as possible.
An obvious bearish breakout of the weekly demand level at 1.1100 allowed the price to fall dramatically.
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 ongoing bullish momentum around the key zone of 1.1150-1.1050 on April 29. Temporal bullish fixation took place above 1.1100 shortly after.
Further bullish advancement was enhanced until bearish pressure was applied around 1.1450 (just below the depicted supply level of 1.1500).
Last week, a bearish pullback took place towards 1.0800 -1.0830 where an ascending bottom and a bullish breakout pattern were established on the H4 chart.
Bullish persistence above the level of 1.1190 allowed the market to push the price near 1.1390 (Fibonacci Expansion 100%) where significant signs of bearish rejection were expressed on the chart.
Moreover, a Triple-top pattern with lower highs is being formed on the H4 chart. A bearish breakout below the neckline at 1.1100 is needed to confirm the pattern.
As anticipated, the zone of 1.1300-1.1350 constituted a perfect intraday sell zone. An initial bearish target would be located at 1.1090 and 1.1000.
Note that the level of 1.1140 is depicted on the daily chart as a prominent demand/support level. That is why, a bearish daily candlestick closure below 1.1140 is mandatory before resuming towards lower targets.
The material has been provided by InstaForex Company - www.instaforex.com