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The Euro survived the test of short-term Fibonacci support, and as we have expected, started a correction move up, without breaking 1.4300, and stopped just 8 pips below what we have called the most important resistance in yesterday's report. The above mentioned support at 1.4183 will still be the most important for short-term, because a break here will give way to an attempt to reach a lower bottom, below Aug 17th low 1.4045. On the other hand, EURSUD could continue correcting the last drop, and if this move up is corrective as we suspect, it should not break 1.4300, as we can say that this is the most important resistance for the time being. If broken, this move up cannot be classified as a short-term correction, and it will have the ability to fly above 1.44 before the end of the week.
- 1.4230: Fibonacci 61.8% for the micro-term.
- 1.4183: Fibonacci support 61.8%, the most important support for short-term.
- 1.4135: The rising trendline from July's low.
- 1.4300: Fibonacci 61.8% for the short-term, the most important resistance for now.
- 1.4352: the falling trendline from Augusts' high.
- 1.4412: the most important resistance in the wide and crowded resistance area 1.4362-1.4446.
As we have expected in yesterday's report, USDJPY broke the 92.50/92.53 support on 3rd attempt, but the drop to follow was undersized, and could not test the important support area 91.73-91.76. Although this move was smaller than expected, all other things indicate that we are running in a flawless downtrend that is facing no problem. The bottom of the current channel is below 91 now, and the top is at resistance 93.04. It is mandatory to stay inside this channel and below the most important resistance at the moment 93.04. The downtrend will gain more confidence once we break the nearby support 92.06.
- 92.06: short-term support.
- 91.73-91.76: Strong, important support area that combines July 8th, 10th & 13th lows.
- 90.72: the bottom of the falling channel from Aug 7th high.
- 93.04: The trendline falling from Aug 9th, the most important resistance for short-term.
- 93.66: Aug 19th low.
- 94.19: Aug 17th low.
Forex trading analysis by Forexpros - Written by Munther T. Marji
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