EURUSD On the Way to Testing Three Key Supports at Once

This should be another fascinating week for the EURUSD. On Wednesday we have the FOMC and an interest rate decision in US. In theory, Monday should be a quiet day but the European session has already started with a very important movement on the main pair- we’re about to test three great supports all at once!

EURUSD has been through a lot. Last week started out great – with a breakout from the long-term channel down formation (green). The price surged, easily setting monthly highs. The second half of the week was not as awesome though. EURUSD reversed sharply and is now about to test three crucial supports, which happen to be in the same area.

The first one is the upper line of the channel down formation, the one that was broken a week ago. For buyers, it’s an absolute must to stay above that line otherwise the buy signal cancels. The second one is the 38,2% Fibo of the October uptrend which happened to be in the same area as the third support, so the area below the 0,99 crucial support in August and September (orange).

EURUSD starts this week with a drop aiming at those key supports. The outcome of the test, should set the sentiment until the FED’s decision. A bounce from that area will be positive and can give us a short-term buy signal while the breakout below the orange area will be an invitation to go short.