The Federal Reserve Bank made their FOMC meeting announcement yesterday at 12:30PM EST, initiating a EUR/USD strong uptrend. The forex rate was at that time at 1.4670, dropped to 1.4640 one minute after the Federal Open Market Committee meeting’s announcement went back up to 1.4695 two minutes later and EUR/USD is currently trading close to 1.4900 twelve hours afterwards. Short term forex trading is usually not advised during important announcements and FRB news was expected to upset the market. However forex traders could have taken advantage of the trending currency pair, if they paid attention to the 15-minute chart and got long when Euro retraced to the 1.47 resistance level 2 hours later.
1 minute EUR/USD chart (EET time zone)
According to various economic websites, there were no surprises in yesterday’s FOMC statement. Maybe that is why Euro resumed the long term uptrend after all. Anyhow, the forex rate of Euro against US Dollar broke above even yesterday’s R2 pivot point and today is approaching the new R2 pivot point. Pivot points are commonly used as hidden support or resistance levels, but more entry signals are required before initiating a trade. Such signals can be Fibonacci Extensions levels. Upon applying Fibonacci levels from the low at 1.4631 to the high at 1.4796 on the 15-minute chart, the very important 161.8% Fibonacci extension level is aligned exactly with today’s R2 pivot point! Since 1.4900 is also a round number, Euro is likely to meet some kind of resistance at that price level. Looking closely at the charts of shorter time frames (such as 5-min or 1-min), I’ll be searching for an uptrend reversal formation to short Euro.