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 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 breached as soon as possible (bulls have just failed to do so).
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 correspond to the daily uptrend depicted on the chart.
Further bullish pressure was observed until bearish rejection was applied around 1.1400 (Fibonacci Expansion 100% - near the depicted daily supply level).
Yesterday's closure below 1.1300 enabled quick bearish decline towards 1.1140 in the 4-hour chart. Further bearish decline towards 1.1050-1.1080 should be expected.
A price zone of 1.1030-1.1130 constitutes a significant demand zone on the daily chart. It should be watched for a short-term buy entry if early signs of bullish reversal are expressed.
On the other hand, the level of 1.1300 represents a newly established supply level. It should be watched for sell entries if bullish pullback occurs.