It’s such an interesting time in the foreign exchange market. We are seeing huge moves every day in each cross. Making the right trade can be extremely profitable, with 100-200 pip moves everywhere you look.

The place we’re looking today is EUR/USD because we are seeing powerful signals and a potentially sharp move higher or lower.

Let’s take a look at the hourly chart.

It was has been two great days for technicians in EUR/USD trading. After the break below 1.50 we have been looking for a test of the major trendline support that stretches from the March lows (the green line shown).

Yesterday, we got it. And as expected, the trendline didn’t give up easily. Instead, we saw a powerful bounce that looks like a massive reversal on the daily charts.

If this is the case, we can see a quick move back to the 150.50 highs. If we can get a daily close above 1.5050, look for a strong extension high, perhaps as high as the all-time high of 1.60-1.61.

Still, it’s hard to be convinced just yet. The hourly action since the break of 1.4858 hasn’t been as agressive as we hoped.

The pair has also stuggled to get over 1.4668, which is the 61.8% Fibonacci retracement of the downmove from the Oct. 25 high.

 Instead, we’re seeing consolidation right around those key levels. Moreover, the spike to 1.49 came immediately after the FOMC statement, which is a time where the market is prone to false signals.

Our favourite thing about this chart is that something has to give. Either we’re going to make a new high above 1.5050 or we’re going to break below the daily trendline stretching back to March. Either way, there is going to be lots of pips to be made for the rest of the week and into next week.