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 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 still be seen at 0.9450 if a bearish breakdown of the monthly demand level of 1.0550 occurs.
On the other hand, a bullish corrective movement towards 1.1500 and 1.1700 can take place only if a monthly candlestick closes above the 1.1465 level which is a previous weekly high (very low probability).
On August 24, the market looked overbought as bulls were pushing 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 before a bearish breakdown could take place on October 22.
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 1.1000 where the daily uptrend came to meet the EUR/USD pair.
A daily breakdown of the uptrend line has been executed on October 23. This enhanced the long-term bearish scenario with projected targets at 1.0800 and then 1.0600.
A recent bullish pullback was expressed towards the backside of the broken uptrend line around 1.1070-1.1090.
A valid SELL entry was suggested at retesting this broken uptrend earlier this week. It is running in profits now. S/L should be lowered to 1.0990 to secure some profits.
Today, daily persistence below the price level of 1.0900 (prominent daily bottom) is needed to maintain enough bearish momentum towards 1.0800 and 1.0680.
The material has been provided by InstaForex Company - www.instaforex.com