EURUSD: Topped on its Channel Up after the Powell rally

EURUSD rallied heavily following the projected 0.25% rate rise but more importantly a dovish tone from Fed Chair Powell. Typically the first euphoric reactions are already priced in, technically the price reached the top of the Channel Up that goes as back as November.

Turning overbought technically on the 1D time frame (RSI = 70.995, MACD = 0.008, ADX = 49.037), as well as having the 4H RSI rejected in a similar pattern as Jan 12th and Nov 15th, we take that as a sell opportunity and aim at the 4H MA50 (TP = 1.0915). If crossed we will extend selling to the HL trendline (TP = 1.08350) where we will place a half-sized lot buy aimed at the March 31st High (TP = 1.11700). The 2nd half of our buy sequence will be at the bottom of S1 (1.07200) which happens to be the bottom of the Channel Up as well.

Breaking of S1 would mean two potential tests of S2 and S3 before the market settles and neutralizes the December-January rally.


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