The EUR/USD pair moved lower 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.
EUR/USD bears 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 takes place around the level of 1.1450.
Hence, in the long term, a projected target will still be seen at 0.9450 if a bearish breakdown of the monthly demand level of 1.0550 occurs.
On August 24, the market looked overbought as bulls were pushing the pair further beyond the level of 1.1500 (daily supply level).
Hence, a bearish movement towards the level of 1.1150 (61.8% Fibonacci level) was performed, which provided evident bullish rejections for several times before a bearish breakdown could take place on October 22.
Recently, the intraday supply zone of 1.1360-1.1400 provided significant bearish rejection. An intraday sell entry was suggested. T/P levels located at 1.1150 and 1.1050 were already reached.
As anticipated, daily persistence below the level of 1.1150 (61.8% Fibonacci level) exposed the level of 1.1000 where the daily uptrend came to meet the EUR/USD pair.
A daily breakdown of an uptrend line has been executed on October 23. This enhanced a long-term bearish scenario with targets projected at 1.0800 and 1.0600.
A valid sell entry was suggested to retest the uptrend, which had been broken earlier last week. It is running in profits now. S/L should be lowered to 1.0840 to secure some profits.
Today, daily persistence below the level of 1.0800 (prominent bottom established on July 21) is needed to maintain enough bearish momentum towards 1.0680 and 1.0550.
The material has been provided by InstaForex Company - www.instaforex.com