The market was pushed lower after breaking below 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 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 is projected with a target at 0.9450.
However, a bullish corrective movement towards 1.1500 may be executed if May's monthly high 1.1465 gets hit first (bulls have recently failed to step above price level of 1.1435).
After such a long bearish rally (which started around the levels of 1.1300), bullish rejection took place at 1.0570 (monthly demand level).
Multiple ascending bottoms were established around the levels of 1.0470, 1.0550, and 1.0850. These levels corresponded to the daily uptrend depicted on the chart.
Further bullish pressure was observed until bearish rejection was applied around 1.1400 (Fibonacci Expansion 100% on the H4 chart - near the depicted daily supply level).
Fixation below the level of 1.1300 (the lower limit of the H4 channel) caused a quick bearish decline towards 1.1140 at the end of last week.
This week, the market opened around 1.1000 following the daily uptrend. That is why another ascending bottom is expected to be established around current levels.
As long as bulls keep trading above 1.1150, further bullish advancement should be expected.
An initial bullish target would be located at 1.1300 which is a prominent supply level to be watched.
The material has been provided by InstaForex Company - www.instaforex.com