In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100 and 1.2000 where historical bottoms had been previously set in July 2012 and June 2010. Hence, a long-term bearish target is projected towards 0.9450.
In March 2015, the EUR/USD bears challenged the monthly demand level of 1.0570, which had been previously reached in August 1997. Later in April 2015, a strong bullish recovery was observed around the mentioned demand level.
April's monthly candlestick came as a bullish engulfing one. However, next monthly candlesticks (September, October, and November) reflected a strong bearish rejection in the price area around 1.1400.
In February, the depicted price levels around 1.1500-1.1550 acted as a significant supply zone during the current bullish pullback.
Hence, another bearish rejection should be expected around the current price levels. If not, further bullish movement towards 1.1700 should be expected.
In the long-term prospect, the level of 0.9450 will remain a projected bearish target if a monthly candlestick comes to close below the depicted monthly demand level of 1.0570.
On December 2015, a consolidation range between 1.1000 and 1.0800 was established on the daily chart.
On February 3, a bullish breakout was executed above this consolidation range. Bullish fixation above 1.1000 was mandatory to allow bullish movement to continue.
Similar to what happened on October 2015, the supply zone of 1.1410-1.1550 should constitute a significant resistance zone for the EUR/USD pair.
This week, the price level of 1.1600 corresponded to the backside of the broken uptrend line depicted on the chart.
That's why, the depicted shooting-star daily candlestick was expressed indicating significant bearish rejection.
Hence, daily persistence below the price level of 1.1400 is needed to ensure further bearish momentum 1.1330, 1.1210, and 1.1150.
Otherwise, the EUR/USD pair may remain trapped between 1.1410 and 1.1520 until breakout occurs.
The material has been provided by InstaForex Company - www.instaforex.com