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FOREX Technical Analysis: EURUSD Tests Huge Support before Rate Decision

By , Sr. Technical Strategist
08 November 2012 00:56 GMT

DailyBars

FOREX_Technical_Analysis_EURUSD_Tests_Huge_Support_before_Rate_Decision__body_eurusd.png, FOREX Technical Analysis: EURUSD Tests Huge Support before Rate Decision

Chart Prepared by Jamie Saettele, CMT

FOREX Observations: The high for the month thus far is day 1 of the month and the EURUSD has traded into channel support and the 38.2% retracement of the rally from the July low. The level is also defined by the

June high. The decline from the 10/17 high can be counted as an impulse and today also marked a JS Thrust day (large range day).

FOREX Trading Strategy Implications: The emotional trade at the potential end of an impulse into extremely well defined support makes being short a risky proposition for at least the next day or two, especially in light of the ECB rate decision tomorrow. It’s good practice to fade moves on news, which is what I would be willing to do at the next support (12651/92) reached after ECB. On the other hand, a positive reaction could be substantial since the market isn’t prepared for it (as evidenced by today’s decline). I’ll refrain from giving out levels just yet for a positive reaction (will do so live via Twitter @JamieSaettele).

LEVELS: 12651 12692 12736 12805 12876 12924

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08 November 2012 00:56 GMT