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 around the area of 1.1400-1.1500.
In February, the depicted price levels around 1.1400-1.1500 acted as a significant supply zone during the current bullish pullback.
That's why, another bearish rejection was expected around the current price levels (Note the monthly candlestick of May).
In the long-term prospect, the level of 0.9450 will remain a projected bearish target if the current monthly candlestick comes to close below the depicted monthly demand level of 1.0570.
In 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 in October 2015, the supply zone of 1.1410-1.1550 constituted a significant resistance zone for the EUR/USD pair.
On May 5, the 1.1600 level corresponded to the backside of the broken uptrend line depicted on the chart where the shooting-star daily candlestick appeared, indicating significant bearish rejection.
Daily persistence below the 1.1400 level was needed to ensure enough bearish momentum towards the 1.1200 level.
As long as the EUR/USD pair keeps trading below the price level of 1.1200 (recently-broken demand level and a valid level to sell the pair), bearish decline should be expected towards 1.1100 and 1.1000 levels.
Please note that any bearish pullback towards the level of 1.1000 (the depicted uptrend line and a previous consolidation range) should be considered for a valid BUY entry. S/L should be placed below 1.0950.
The material has been provided by InstaForex Company - www.instaforex.com