The pair moved lower after breaking below major demand levels around 1.2100 and 1.2000 where historical bottoms were previously established 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 observed shortly after.
April's candlestick came as bullish engulfing one. However, the next monthly candlesticks (May, June, July, and August) reflected the recent bearish rejection which exists around the price level of 1.1450.
In the long term, a projection target is still seen 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 can take place only if the monthly high of 1.1465 gets breached.
It can be achieved if the current monthly candlestick closes above a weekly high of 1.1465 by the end of the current month (low probability).
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 level of 1.1700.
The market looked overbought as bulls were pushing further beyond the price level of 1.1500 (Daily Supply Level).
Hence, bearish movement took place towards the level of 1.1150 (61.8% Fibonacci level), which provided evident bullish rejection (note the recent daily candlesticks).
As anticipated, the intraday supply zone of 1.1300-1.1330 provided significant bearish rejection. An intraday sell entry was suggested with T/P levels placed at 1.1150 and 1.1050.
On the other hand, daily persistence below the level of 1.1150 (61.8% Fibonacci level) is mandatory to expose the next demand level around 1.0980 where the daily uptrend comes to meet the pair.
Conservative traders should wait for more bearish pullback towards the price zone of 1.0980-1.1000 (the depicted uptrend line) for a valid buy entry.
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