Forex Technical Update
The 1.3030 low held, and the EUR/USD continues a correction against the decline from near 1.3380 down to 1.3030. The 1H chart shows that the RSI popped above 60 and tags 70, a sign of short-term bullish momentum. It also shows that a conventional double bottom target would be the 1.3180 level. However, consider the 1.3162 level as the first possible level of resistance. It is 38.2% retracement (of the swing from about 1.3380 to 1.3030) and a previous resistance pivot from a previous consolidation from April 4-5.
Looking at the 4H chart. It appears that another cluster of resistance is in the 1.3225 up to the 1.3250 level. A break above 1.3250 reflects a loss failed bearish attempt, and starts to suggest a sideways to bullish market, especially if the RSI pushes above 60 and tags 70.
Fundamentally, the Spain and Italy debt story continues to pressure the EUR, and whether the Fed considers QE or some form of stimulus is the risk factor for USD. We get some Fed members speaking this week, so make sure to align the reaction to resistance to the reaction to the clues we get from the Fed.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.