On January 2015, the EUR/USD pair moved below the major demand levels around 1.2100 and 1.2000 where historical bottoms were previously established back in July 2012 and June 2010. Hence, a long-term bearish target is projected towards 0.9450.
On March 2015, EUR/USD bears challenged the monthly demand level of 1.0570 (reached in January 1997). A month later, a strong bullish recovery was observed around the mentioned demand level.
The April candlestick came as a bullish engulfing one. However, next monthly candlesticks (September, October, and November) reflected strong bearish rejection around the level of 1.1450.
As mentioned above, the long-term projected target will still be seen at 0.9450 if the current monthly candlestick closes below the depicted demand level of 1.0570.
On August 2015, 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 produced significant bearish pressure.
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.
On November 2015, daily persistence below the level of 1.0800 (prominent key level) ensured enough bearish momentum towards 1.0550 (monthly demand 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 the significant supply level to offer valid sell entries. Moreover, a Head and Shoulders reversal pattern was formed as depicted on the chart. That is why, the current bullish pullback towards 1.1000 should be taken into for selling the EUR/USD pair again.
The previous bearish closure below 1.0800 (the reversal pattern neckline) confirmed the depicted reversal pattern. An estimated bearish target is located at 1.0620.
Today, a bearish closure below 1.0800 (neckline of the depicted reversal pattern) is needed to allow further bearish decline to occur towards 1.0730, 1.0620, and 1.0570.
On the other hand, bullish persistence above 1.0830 hinders further bearish decline. Hence, another bullish pullback towards 1.1000 would be expected.
The material has been provided by InstaForex Company - www.instaforex.com