The market has been aggressively pushing lower after breaking below 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 1600 pips since the beginning of 2015. Now, the EUR/USD pair is pushing further below monthly demand around 1.0550 (Established on January 1998) where some bullish recovery is expected to exist around.
On the other hand, theoretical long-term bearish targets would be located near 0.9450. That’s why price action should be watched around the current monthly demand level.
A bearish Flag pattern was established on the daily chart. The daily fixation below the price level of 1.1260 (minor consolidation range) confirmed that bearish pattern.
Obvious bearish breakdown of the weekly demand level at 1.1100 enhanced the bearish side of the market exposing lower targets initially around 1.0800.
Full Projection targets for the Flag pattern were successfully reached around 1.0800 and 1.0500.
After the bearish rally off 1.1300, conservative traders should be looking for low-risk BUY opportunities at lower prices.
Price action should be watched around 1.0550 on the H4 and daily charts looking for signs of bullish reversal to confirm buy position we have suggested.
Daily closure above price zone of 1.0630-1.0660 indicates a quick corrective movement towards 1.0850 initially.
The material has been provided by InstaForex Company – www.instaforex.com