EUR/USD: Excellent reversal opportunities!

Hello everyone! Today I want to share my thoughts on the current situation of EUR/USD. After the release of the Federal Reserve data, we are considering a possible short setup. However, during this decline, the market broke a key support level at 1.0640. This might trigger a market reaction and a shift to long positions.

To make informed decisions, I've decided to enter the market only at the close of the London session. The reason for this choice is the significant high-impact American data expected in the morning during New York trading hours. My goal is to identify a structural breakout to the upside on the M15 timeframe and subsequently take advantage of a pullback.

On a technical level, EUR/USD is currently trading in the upper half of a descending regression channel. The Relative Strength Index (RSI) on the four-hour chart indicates a bearish bias, remaining slightly above the 40 mark. This suggests a potential for a technical correction in the short term.

On the positive side, 1.0670, representing the 20-period Simple Moving Average (SMA) and the upper limit of the descending channel, acts as immediate resistance. Next, we have 1.0700 - a psychological level and a support level, along with the 50-period SMA. A breakthrough of the latter could attract buyers and pave the way for an extended recovery towards 1.0740, where we find the 100-period SMA.

Crucial on the support level is 1.0630, representing a static level and the mid-point of the descending channel. In case EUR/USD falls below this and begins to use it as resistance, we might witness a move towards 1.0600 - a psychological and static level, followed by the lower limit of the descending channel at 1.0540, a static level dating back to March.

Please share your thoughts on this analysis. See you soon! Greetings from Nicola, CEO of Forex48 Trading Academy.