Attached is the 1H chart for EURUSD. As expected and as specified in my article yesterday, EU went down very well and as specified, it went down till 1.3860. Then the bounce back up came about and this then carried EU right back up to where it was at the start of the day. This shows the strength of EU.
But last few hours EU seems to have been caught in a very tight range. As can be seen from the chart, for the last 8-10 hrs, EU seems to be caught in a range of 30 pips. This shows a very tight range and it also shows that when a breakout happens in either direction, it is going to be fast and strong and it is going to be a big move.
Anyway, on the downside, as specified yesterday, expect some support at around 1.3960 and then at 1.39. If these are broken, expect some strong support at 1.3860. I do not expect this support to be broken.
On the upside, there is strong resistance at around 1.4000 and then at 1.4050. It will take a huge effort for it to break this resistance.
Today, we might be in for another ranging day between 1.3860 and 1.4050 though EU has not shown a clear direction yet. Play the range till the breakout in either direction.
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