The market has been pushing lower aggressively 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.
The EUR/USD pair has lost almost 800 pips since the beginning of 2015. Moreover, theoretical long-term bearish targets would be located near 0.9450, especially after the FULL bearish MONTHLY below 1.2000 (January’s monthly candlestick).
The breakout below 1.2000 and 1.1900 (prominent psychological SUPPORT) allowed a quick bearish decline towards 1.1100 to take place few days later.
Conservative traders were suggested to wait for a bullish pullback looking for better prices to SELL the EUR/USD pair off (R1 at 1.1550 and R2 at 1.1700).
However, note that a bearish Flag pattern is being established on the daily chart. A low-risk SELL entry can be taken around 1.1570-1.1590 where a prominent DAILY SUPPLY is roughly located.
The price zone of 1.1470-1.1490 is a recently established SUPPLY zone on the H4 chart (the upper limit of a newly-established consolidation zone).
Short-term SELL positions can be taken there. Stop loss should be placed slightly above the price level of 1.1530 (the recent high).
Moreover, risky traders can wait for DAILY closure below 1.1260 (recent DEMAND level, lower limit of the H4 consolidation zone).
This probably indicates a bearish visit towards the WEEKLY low around 1.1110.
The material has been provided by InstaForex Company – www.instaforex.com