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 on January 1997). Bullish recovery was expressed shortly after.
April's monthly candlestick came as a bullish engulfing one. However, the next monthly candlesticks (May and June) reflected recent bearish rejection being expressed around 1.1450.
In the long term, a projection target is still located at 0.9450 provided that a bearish breakdown of the monthly demand level at 1.0550 occurs soon.
A bullish corrective movement towards 1.1500 could have been possible only if May's monthly high at 1.1465 gets breached (considered a very low probability currently).
After such a long bearish rally (which started around the levels of 1.1300), bullish rejection took place at 1.0570 (monthly demand level).
Multiple ascending bottoms were established around the levels of 1.0470, 1.0550, and 1.0850. These levels corresponded to the daily uptrend depicted on the chart.
Further bullish pressure was observed until bearish rejection was applied around 1.1400 (long-term double-top reversal pattern).
A daily closure below the level of 1.1150 brought the EUR/USD pair to 1.1000 again where the uptrend came to meet the EUR/USD pair.
As anticipated, a bearish daily closure below 1.0950 enabled a quick bearish decline towards 1.0850 (was already reached) and 1.0700 yet to come (projection target for the reversal pattern).
Initial bullish recovery was manifested yesterday after hitting the level of 1.0810. Bulls have been trying to bring a bullish corrective movement towards 1.1000.
The current bullish pullback towards the recently-established supply zone (price zone of 1.0950-1.0990) can offer a valid sell entry. S/L should be located above 1.1050. T/P levels should remain at 1.0850 and 1.0700.
The material has been provided by InstaForex Company - www.instaforex.com