This summer we saw the EUR/USD finally breakout above the triangle pattern it has been in since last February, but our expectations for a real breakout continuation towards 1.20 were smashed with sellers bringing the pair back down from 1.17 towards 1.11 where the daily cloud support is found.
The decline from 1.1704 is impulsive, no matter what Fed does regarding the rates this is what I was expecting the EUR/USD to do.
EUR/USD bounced towards the 61.8% Fibonacci retracement as I expected since FED kept rates unchanged only to see a bearish reversal from the 1.1460 area. I opened a short position at 1.1447 and that I would add below 1.1380.
So what now? EUR/USD has reversed from the 61.8% retracement and is testing the 4 hour Ichimoku cloud support and the red upward sloping trend line. Breaking below this support will accelerate selling pressures and push price towards 1.10 where the longer-term support is found.
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