On the monthly chart of the currency pair, if you count the 2008 high of 2.08 as the high and 1.16 low of late-2012 as the low, then the price action fits the following pattern:
- The ‘high to low’ move was followed by a clean break of the 76.4% retracement level and a successful test of the 61.8% retracement level of that move.
- The pair found support at the 76.4% retracement level, broke through the 61.8% level and successfully tested the 50% retracement level.
- The pair found support, again, at the 76.4% retracement level and as of this writing is testing the 61.8% retracement level around 1.5125.
A clear close above 1.5125 should open up further possibilities of retesting the 50% retracement level at around 1.62, that’s a thousand points if you are a forex trader.
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