In the last two days we have seen a dramatic decrease in the price of EUR/USD.
In order to determine future support and resistance levels for the bearish trend with Fibonacci method we need to wait for the first major support to develop and that is where I will place the 61.8% Fib level. Saying that, it should be noted that although on a daily chart price closed below a multiday trend line, weekly lower trend line still holds.
Using our Fibonacci method on a weekly timeframe I would like to show you how it was possible to forecast this sudden decline in the price. Using the same method as on a daily chart I have placed the zero level on the bottom of the trend and the 61.8% on the next major resistance level(red line) this gave us an estimated resistance level of 1.4821. Although the price exceeded this level it did not manage close above it, this was followed by a drop to 1.43614 which is the 23.6%. From point of view of this analysis, nothing unusual has happened as of now.
The next step is to see if the price will break the 23.6% level and the lower trend line and then continue with bearish trend or we will see another bullish extension.
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