The market has been pushing lower aggressively 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.
The EUR/USD pair has lost almost 1600 pips since the beginning of 2015. This week, the EUR/USD pair has been pushed further below monthly demand around 1.0550 (established on January 1997) where some bullish recovery is expected to exist.
On the other hand, theoretical long-term bearish targets would be located near 0.9450. That is why the price action should be watched around the current monthly demand level looking for monthly closure below 1.0570 (significant bottom that goes back to 1997).
A bearish Flag pattern was established on the daily chart. The daily fixation below the price level of 1.1260 (minor consolidation range) confirmed that bearish pattern.
Obvious bearish breakdown of the weekly demand level at 1.1100 enhanced the bearish side of the market exposing lower targets initially around 1.0800.
Full projection targets for the Flag pattern were successfully reached around 1.0800 and 1.0500.
As anticipated, after such a long bearish rally (which started off 1.1300), sure signs of bullish rejection was anticipated around 1.0570 (monthly demand level).
Note that daily persistence above the price zone around 1.0630-1.0660 (achieved yesterday) indicates a quick corrective movement towards 1.1100 where a long-term sell position can be offered.
Uitgevoerd door, Analytische expert
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