Reaching the top of the channel at 1.4684, but not breaking it, the Euro is still inside the suggested area for a top. The top of the channel is slowly approaching 1.47, more accurately it is currently at 1.4691. And between here and 1.4720 we have a good resistance that can curb this slow rise. If this happens, we will break 1.4654 and head towards the short-term 61.8% Fibonacci support at 1.4607, which the euro needs to hold above to survive the expected correction. If it does not hold above here, the correction would be already underway, targeting 1.4459 at least, in the next few days. On the other hand, if the euro surprises and breaks the whole 1.4691-1.4720 area, then there would be no reason to believe a correction is going to start from these areas. In this case, we are heading to many resistance levels above 1.48 the first of which is 1.4824.
• 1.4654: Asian session low.
• 1.4607: short-term 61.8% Fibonacci support.
• 1.4534: Sep 8th high.
• 1.4691-1.4720: the resistance area between the top of the current channel on the hourly chart, and the unforgettable top of December 2008.
• 1.4774: previous well known resistance/support.
• 1.4824: previous daily high.
We came close to the ideal target for this correction: 91.74 (Fibonacci 50% retracement, SMA100 on the hourly chart & the previous important support 91.73-91.76), and reached 91.63 yesterday. And now, the falling trend channel is exactly at this level, which makes it the most important resistance for today, more important than 92.10. Although the ideal target for the current correction will still be 91.74, there is a possibility to target 92.10, but when we compare these two targets, we find that the most important is 91.74 since it combines a Fibonacci resistance, and a previous support, and even more important the top of the falling channel. As for the support, short-term Fibonacci support at 90.77 has proven its importance when the price bounced from there twice, once before reaching yesterday's high, and once after. We believe that breaking 91.74 or 90.77 is what will decide the direction of the next hours, and may be the next few days. Breaking the resistance 91.74 will take the price up at least to 92.10, and may be to test the top 93.28. Breaking the support 90.77 would mean that the correction is over, and the down trend is back on track targeting 89.78-89.68.
• 90.77: Fibonacci 61.8% support for short-term, which survived twice until now.
• 90.29: short-term support.
• 89.68/78: important support area containing the lows of Feb 11th, 12th & Dec 29th 08.
• 91.74: Fibonacci 50% for the last move falling from 93.28, the most important resistance for today.
• 92.10: Fibonacci 61.8% for the same move.
• 92.70-92.80: previous support area which contains a number of daily lows in the past few months.
Forex trading analysis by Forexpros – Written by Munther T. Marji
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