The EUR/USD pair fell to the low of 1.1749 yesterday. This is where the 61.8% Fibonacci retracement is located and also 1/8 of murray. It coincides with the lower line of the bearish channel and has become key support. The price is now bouncing above this level and it is likely to continue to rise until it finds resistance at the 200 EMA.
On the 4-hour chart, the euro is trading within a downtrend channel that originated on September 3 when it reached the resistance level of 6/8 Murray at 1.1901. From this point, it has been falling in a sequence of lower lows to find strong support at 61.8% Fibonacci.
The retracement that the euro made to 61.8% Fibonacci will be validated only if the pair breaks through the downtrend channel and consolidates above the 200 EMA at 1.1808. Then it could rise to 1.1840 and 1.1901.
On the other hand, the euro is preparing for the results of the Federal Reserve meeting that will take place next week. Investors expect a surprise from the FOMC regarding the time when the Fed begins to cut back on its current bond buying program.
If EUR/USD fails to achieve a daily close and consolidation above the key level of 1.1808, it is likely to continue the downward movement to the 1.1750 support level. However, a sharp break below 61.8%. Fibonacci could push it to the key support of +2/8 murray at 1.1657.
The technical reading of the eagle indicator shows that it has reached the level of 5 which represents an imminent technical rebound. This happened when the euro was trading at 1.1750 which is a sign that it will defend its level of support at 1.1750. We also see a bearish line projecting above the indicator's moving average which shows that the euro is under downward pressure.
Support and Resistance Levels for September 17 - 20, 2021
Resistance (3) 1.1862
Resistance (2) 1.1831
Resistance (1) 1.1806
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Support (1) 1.1745
Support (2) 1.1735
Support (3) 1.1718
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Trading tip for EUR/USD for September 17 - 20, 2021
Sell below 1.1808 (EMA 200), with take profit at 1.1750 and 1.1718 (0/8), stop loss above 1.1840.
Buy if the euro rebounds at 1.1750, with take profit at 1.1808, stop loss below 1.1715.
