In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100 where historical bottoms were previously set in July 2012 and June 2010. Hence, a long-term bearish target was projected towards 0.9450.
In March 2015, the EUR/USD bears challenged the next monthly demand level around 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. However, next monthly candlesticks (September, October, and November) reflected a strong bearish rejection around the area of 1.1400-1.1500.
Again in February 2016, the depicted price levels around 1.1400-1.1500 acted as a significant supply zone during the bullish pullback.
That is why, recent bearish rejection was expected around the depicted supply levels (note the monthly candlesticks of May, June, and August 2016).
In the long term, 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.
The long-term outlook for the EUR/USD pair remains bearish as the monthly chart illustrates. Bearish fixation below 1.1000 is needed to enhance this bearish scenario.
On August 16, temporary bullish breakout was expressed above the price zone of 1.1250 (supply level 1). However, significant bearish rejection was seen on August 26.
On September 6, weak bullish recovery and a temporary bullish breakout above 1.1250 were expressed again, but evident bearish pressure was applied on the EUR/USD pair on September 16.
The recent bearish closure below 1.1250 (Supply Level-1) maintained enough bearish pressure and enhanced the bearish momentum towards the price level of 1.1000 (Key-Level 1).
Bullish rejection was expected around the price level of 1.1000 (Key Level-1). However, extensive bearish pressure and significant bearish closure below 1.0900 was expressed.
Daily persistence below 1.0990 allowed a quick bearish decline towards 1.0825 (Key Level-2) where price action should be considered for a valid short-term BUY entry.
Last week, recent bullish recovery was manifested around 1.0850. That's why, the current bullish pullback towards 1.1000 (Key Level-1) should be considered for a valid SELL entry.
The material has been provided by InstaForex Company - www.instaforex.com