EUR/USD ? Bearish Correction Completes a Double Top

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EUR/USD 1H Chart 9/18/2012 6:50AM EDT

The EUR/USD failed to sustain a new high in yesterday's (9/17) US trading session, when the market tested Friday's 1.3169 high. There was a quick rejection there and the market fell under the 1.3120 intra-session pivot. In the previous update, I noted that a break below this pivot suggests further consolidation, and possible double top formation. The 1-hour chart shows that this pivot became resistance before the market completed the double top during 9/18 European trading.

The 1H RSI reading is falling below 40, a sign that the bullish momentum in the short-term is lost. The 1H chart shows a double top breakout projection, which targets the 1.30 handle. This scenario is the one the 9/18 US session will be faced with. However if there is a pullback, back above 1.3120, this bearish outlook would not look good. A hold below 1.31 would be a good sign that the market is focused on further bearish correction.

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for 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.