The pair moved 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.
EUR/USD bears have already pushed the price slightly below the monthly demand level of 1.0550 (established in January 1997). Bullish recovery was observed shortly after.
April’s candlestick came as bullish engulfing one. However, the next monthly candlesticks (June, July, August, and September) reflected the recent bearish rejection, which exists around the level of 1.1450 (depicted on the chart with small red arrows).
In the long term, a projected target will be still seen at 0.9450 if a bearish breakdown of the monthly demand level of 1.0550 occurs soon.
On the other hand, a bullish corrective movement towards 1.1500 and 1.1700 can take place only if the current monthly candlestick closes above 1.1465 (weekly high) by the end of this month (low probability).
Multiple ascending bottoms were established around the levels of 1.0830 and 1.1020. These levels corresponded to a current daily uptrend depicted on the chart.
Shortly after, the market looked overbought as bulls were pushing the price further beyond the level of 1.1500 (daily supply level).
Hence, a bearish movement towards the level of 1.1150 (61.8% Fibonacci level) took place providing evident bullish rejections several times in a row.
Previously, the intraday supply zone of 1.1360-1.1400 provided significant bearish rejection. An intraday sell entry was suggested with T/P levels placed at 1.1150 and 1.1050 were all reached.
As anticipated, daily persistence below the level of 1.1150 (61.8% Fibonacci level) exposed the price level of 1.1050 where the daily uptrend comes to meet the EUR/USD pair. Daily breakdown of the uptrend line has been executed on Friday.
The price level of 1.1000 remains a significant demand level to be watched for a price action. Some bullish recovery is being expressed during today’s consolidation.
However, daily persistence below 1.1000 enhances the long-term bearish scenario with a projected target at 1.0600.
On the other hand, the price level of 1.1150 (61.8% Fibonacci) now constitutes a significant supply level to be watched for valid SELL entries.
The material has been provided by InstaForex Company – www.instaforex.com