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 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 obvious MONTHLY closure below 1.2000.
During the past few weeks, the EUR/USD bears have been challenging historical lows that were established back in 2005 and 2003. Some bullish recovery was finally witnessed by the end of January.
On the daily chart the market looked oversold below the price level of 1.2000 and 1.1900 (prominent psychological SUPPORT).
As it was suggested in the previous articles, conservative traders should be waiting for a bullish pullback looking for better prices to SELL the pair off (R1 at 1.1550 and R2 at 1.1700).
The price zone of 1.1540-1.1600 is a recently established SUPPLY zone. Short-term SELL positions can be taken there. Stop loss should be placed slightly above the price level of 1.1680.
On the other hand, daily fixation again below 1.1260, which is a recent DEMAND level, exposes the recent lows around 1.1110 for retesting.
The material has been provided by InstaForex Company – www.instaforex.com