The Euro advanced to 1.4761 before retreating back to 1.4682, and with that, it stayed for the whole past 24 hours above the important support specified in yesterday's report 1.4668, keeping our positive outlook intact. But even with this new high, things have changed a lot, because the Euro is threatened with a correction for the whole move from 1.4480, after spotting reversal signals on the Japanese candlestick charts: a (Shooting Star) pattern on the hourly chart, and an (Engulfing) pattern on the 4 hour chart.

That is why we will drive our attention towards Fibonacci retracement levels for the move from 1.4480 on Friday to 1.4761 yesterday. But, we will not assume there is a correction underway, before trading below the moving average SMA50, which clearly supported the price since Friday, and is running currently at 1.4682. As long as the price is above the moving average, we will maintain a positive outlook for the short-term, and we believe that there will be another attempt to break 1.4720 and head higher.

And although we notice a resistance at 1.4776, we believe that if the Euro breaks 1.4720, then it will be able to reach areas above 1.48 within 24 hours after the break, first of which is 1.4824, then new highs above the tops of September 22nd & 23rd.

Support:

• 1.4682: the moving average SMA50, supporting the Euro since Friday.

• 1.4621: Fibonacci 50% for the rise from 1.4480 on Friday to 1.4761 yesterday.

• 1.4587: Fibonacci 61.8% for the rise from 1.4480 on Friday to 1.4761 yesterday. In case this support is broken, 1.4509 will be a key support for the medium-term.

Resistance:

• 1.4720: the resistance area that stopped the Euro from rising 3 times lately.

• 1.4776: previous well known resistance. • 1.4824: previous daily high.

Forex trading analysis by forexpros. com - Written by Munther T. Marji