EUR/USD (daily chart) as of October 24, 2012, has continued its decline of the last several trading days to settle tentatively at a key uptrend support line extending back to the July 1.2040 2-year low. This decline occurs after price hit a high of 1.3137 just last week, failing to reach up to the 1.3170 key resistance level established in September. Having tentatively broken down below the 1.3000 level and fallen to the bullish trend line, price can be seen to be at a critical juncture. Any substantial breakdown below the trend line could find immediate potential support around the 1.2800 price region, which held strong as robust support for two bearish retracements within the last month. To the upside, a bounce off trend line support that moves back above the key 1.3000 psychological level could once again move towards a resistance retest of the September 1.3170 high, with a longer-term potential upside objective around the 1.3500 price region.
James Chen, CMT
Chief Technical Strategist
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