EURUSD recently broke above a falling trend line on its 1-hour time frame, indicating that the downtrend is already over.

he pair also surged past the 1.3800 area of interest, suggesting that more gains are in the works.

Do take note though that stochastic has already reached the overbought area, which means that buyers are already exhausted. In this case, a pullback to the previous area of resistance might be in the cards before the pair moves any higher.

Traders might be interested to fade the reaction to the FOMC release.

With that, EUR/USD might retrace to the 1.3750 minor psychological support and broken trend line around 1.3700.

Going long at 1.3750 with a stop below 1.3700 back under the trend line and a target of new highs near 1.4000 could make a good return on risk for a swing trade.

Editor’s Note: Equity investors/traders can use the Currency Shares Euro Trust (FXE, quote) ETF to take positions in the euro without a FOREX account.  The ETF looks to track the price of the euro, minus ETF fee. The fund seeks to reflect the price of the euro with the shares representing a cost-effective investment relative to investing in the FOREX market.

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