The pair moved 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.
EUR/USD bears have already pushed the price slightly below the monthly demand level of 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 (June, July, August, and September) reflected the recent bearish rejection, which exists around the level of 1.1450 (depicted on the chart with small red arrows).
Hence, in the long term, a projected target will be still seen at 0.9450 if a bearish breakdown occurs at the monthly demand level of 1.0550.
On the other hand, a bullish corrective movement towards 1.1500 and 1.1700 can take place only if the current monthly candlestick closes above 1.1465 (weekly high) by the end of this month (very low probability).
Multiple ascending bottoms were previously established around the levels of 1.0830 and 1.1020. These levels corresponded to a current daily uptrend depicted on the chart.
On August 24, the market looked overbought as bulls were pushing the price further beyond the level of 1.1500 (daily supply level).
Hence, a bearish movement was expressed towards the level of 1.1150 (61.8% Fibonacci level), which provided evident bullish rejections for several times in a row.
Recently, the intraday supply zone of 1.1360-1.1400 provided significant bearish rejection. An intraday sell entry was suggested.T/P levels located at 1.1150 and 1.1050 were already reached.
As anticipated, daily persistence below the level of 1.1150 (61.8% Fibonacci level) exposed the level of 1.1050 where the daily uptrend comes to meet the EUR/USD pair. Daily breakdown of the uptrend line has been executed on last Friday.
As anticipated, the level of 1.1000 was broken to the downside by the strong bearish momentum was gained on Wednesday. This enhances the long-term bearish scenario with projected targets at 1.0800 then 1.0600.
However, a recent bullish pullback was expressed towards 1.1070-1.1090 today.
The zone of 1.1050-1.1090 (backside of the broken uptrend line) constitutes a significant supply level to be watched for valid sell entries. S/L should be placed above 1.1140.
The material has been provided by InstaForex Company - www.instaforex.com