The market was pushed lower after breaking below the major demand levels around 1.2100 and 1.2000 where historical bottoms were previously hit back in July 2012 and June 2010.
The EUR/USD pair has lost almost 850 pips since the beginning of 2015. Moreover, EUR/USD bears have already pushed the price slightly below the monthly demand level of 1.0550 (established on January 1997).
The previous monthly closure had a negative impact on the EUR/USD pair. However, April's monthly candlestick came as a bullish engulfing candle on the chart.
In the long term, a bearish breakout of the monthly demand level at 1.0550 should not be excluded as the long-term breakout target is projected towards the level of 0.9450.
However, a bullish corrective movement towards 1.1500 and 1.1600 is expected now if May's monthly high (1.1465) gets breached as soon as possible.
After such a long bearish rally (which started around the levels of 1.1300), bullish rejection was expressed at 1.0570 (monthly demand level).
A bullish continuation pattern with an ascending bottom was established around the level of 1.0650.
That is why bears failed to hinder ongoing bullish momentum around the key levels of 1.1150-1.1050 on April 29. Temporal bullish fixation took place above 1.1100 shortly after.
Further bullish advancement was enhanced until bearish pressure was applied around 1.1450 (just below the depicted supply level of 1.1500).
Hence, a bearish pullback took place towards 1.0800 -1.0830 where the most recent bullish swing was established in the H4 chart.
Bullish persistence above 1.1150-1.1200 allowed the market to be trading around the level of 1.1390 (Fibonacci Expansion 100%) where significant bearish rejection was previously expressed.
The next resistance is located around 1.1550 (141.4% FE) if EUR/USD bulls push again above price zone of 1.1380-1.1400 (100% FE).
On the other hand, persistence below the level of 1.1400 brings the pair to the level of 1.1200 again.
The material has been provided by InstaForex Company - www.instaforex.com