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 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 (May, June, July, and August) reflected the recent bearish rejection, which exists around the level of 1.1450.
In the long term, a projected 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 at 1.1465 gets breached.
It can be achieved if the current monthly candlestick closes above the weekly high of 1.1465 by the end of the current month (low probability considering September's monthly candlestick that is obviously bearish).
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.
Continuous bullish pressure took place until significant bearish resistance was faced around the levels of 1.1480 and 1.1700.
The market looked overbought as bulls were pushing the price further beyond the level of 1.1500 (daily supply level).
Hence, a bearish movement towards the level of 1.1150 (61.8% Fibonacci level) took place, which provided evident bullish rejections several times in a row (note the recent daily candlesticks during last week's consolidations).
Previously, the intraday supply zone of 1.1360-1.1400 provided significant bearish rejection. An intraday sell entry was suggested with T/P levels placed at 1.1150 (achieved) and 1.1050 which was not reached as the price level of 1.1150 prevented further bearish decline.
Daily persistence below the level of 1.1150 (61.8% Fibonacci level) was needed to expose the next demand level around 1.0980 where the daily uptrend comes to meet the EUR/USD pair. However, bullish demand was expressed around the 1.1150 level, which led to the current pullback towards the intraday SELL ZONE at 1.1370-1.1400.
Conservative traders should wait for a bearish correction towards the zone of 1.0980-1.1000 (the depicted uptrend line) for a low-risk 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