Previously, 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) where bullish recovery was initiated.
April's candlestick came as bullish engulfing one. However, next monthly candlesticks (September, October and November) reflected strong bearish pressure around the level of 1.1450.
A long-term projected target is still seen at 0.9450 if a bearish breakout below the monthly demand level of 1.0570 occurs before the end of this month (January).
On August 24, the EUR/USD pair looked overbought as the market spiked above the level of 1.1500 (daily supply level).
Shortly after, the intraday supply zone of 1.1360-1.1400 provided significant bearish pressure. 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 was performed on October 23. This enhanced a long-term bearish scenario with targets at 1.0800 and 1.0600.
One month ago, daily persistence below the level of 1.0800 and 1.0700 (key levels) ensured enough bearish momentum towards 1.0550 (prominent monthly level) where the recent bullish pullback was initiated towards 1.0800 and 1.1000.
During the last few weeks, the level of 1.1000 was considered to be the significant supply level to offer valid sell entries. Moreover, a Head and Shoulders reversal pattern is presented around the mentioned supply level as depicted on the chart.
A previous bearish closure below 1.0800 (the reversal pattern neckline) once confirmed the depicted reversal pattern. An estimated bearish target is located at 1.0620.
Today, bearish persistence below 1.0800 (neckline of the depicted reversal pattern) is mandatory to allow more bearish decline to occur towards 1.0730, 1.0620, and 1.0570.
Otherwise, note that a bullish closure above 1.0825 hinders a further bearish decline allowing more sideways movements to take place.
The material has been provided by InstaForex Company - www.instaforex.com