The EUR/USD 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 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 (July, August, September and October) reflected recent bearish rejection, which was expressed around the level of 1.1450.
Hence, in the long term, a projected target is still seen at 0.9450 if a bearish breakdown of the monthly demand level at 1.0575 occurs before the end of the current month.
On August 24, the market looked overbought as bulls were pushing the pair further beyond the level of 1.1500 (daily supply level).
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.
A bearish breakdown of the depicted uptrend line has been executed on October 23. This enhanced a long-term bearish scenario with targets projected at 1.0800 and 1.0600.
Two weeks ago, daily persistence below the level of 1.0990 exposed the next demand level around 1.0850 where prominent bottoms were previously established in May, July, and August.
This week, daily persistence below the level of 1.0800 (prominent bottom established on July 21) is needed to maintain enough bearish momentum towards 1.0650 and 1.0530 (prominent monthly low).
Moreover, a valid sell entry can be offered around price level of 1.0850 if the current bullish correction persists above 1.0700 (Friday's lowest price level).
On the other hand, bearish closure below 1.0700 allows further bearish decline towards the next demand level at 1.0600.
The material has been provided by InstaForex Company - www.instaforex.com