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.
EUR/USD bears have already pushed the price slightly below the monthly demand level at 1.0550 (established on January 1997). Bullish recovery was expressed shortly after.
April's monthly candlestick came as a bullish engulfing one. However, the next monthly candlesticks (May, June, and July) reflected recent bearish rejection being expressed around 1.1450.
In the long term, a projection target will be still located at 0.9450 if a bearish breakdown of the monthly demand level at 1.0550 occurs soon.
On the other hand, a bullish corrective movement towards 1.1500 will be possible only if May's monthly high of 1.1465 gets breached. This can be achieved if the current monthly candlestick closes as a bullish engulfing one by the end of August.
After such a long bearish rally, which started around the level of 1.1300, long-term 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 (double-top reversal pattern). That is when the EUR/USD bears managed to achieve bearish breakdown of the depicted uptrend line on July 13.
Recently, evident bullish recovery was expressed after hitting the level of 1.0800. Since then, bulls have been trying to bring a bullish corrective movement towards 1.1150 and 1.1250 where the backside of the broken uptrend is located.
The H4 chart shows a recent bullish swing being established within an ascending channel. The upper limit of this channel comes to meet the pair around the price level of 1.1300. It also corresponds to 100% Fibonacci Expansion level of the most recent bullish swing.
The market looks overbought as the bulls are pushing above the price level of 1.1250 (backside of the broken DAILY uptrend). Counter-trend SELL entries can be offered at such circumstances.
A valid SELL entry can be offered around 1.1300. S/L should be set as daily closure above 1.1350. T/P levels should be located at 1.1240 and 1.1160.