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 previously 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, next monthly candlesticks (August, September, October and November) reflected strong bearish rejection, which existed around the level of 1.1450.
Hence, the long-term projected target is still seen at 0.9450 if a bearish breakout below the monthly demand level of 1.0555 occurs before the end of this month (December).
On August 24, the market looked overbought as bulls were pushing the pair further above the level of 1.1500 (daily supply level).
Shortly after, the intraday supply zone of 1.1360-1.1400 provided significant bearish rejection. An intraday sell entry was suggested. All T/P levels located at 1.1150 and 1.1050 were already reached.
A bearish breakout of the depicted uptrend has been performed on October 23. This enhanced a long-term bearish scenario with targets projected at 1.0800 and 1.0600.
Three weeks ago, daily persistence below the level of 1.0700 (key level) ensured enough bearish momentum towards 1.0550 (prominent monthly low) where the recent bullish pullback was initiated.
This week, the level of 1.1000 constituted a significant supply level to offer a valid sell entry. S/L should be placed above 1.1010. Initial T/P levels should be located at 1.0900 and 1.0810.
On the other hand, an obvious bearish closure below 1.0820 is needed to allow a further bearish decline towards 1.0730 and possibly 1.0550 again.
The material has been provided by InstaForex Company - www.instaforex.com