Forex Technical Update

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EUR/USD 4H Chart 10/1/2012 7:15AM EDT

EUR/USD 10/1/2012 4H chart

Choppy rundown: The EUR/USD has been chopping its way down from 1.3170 to 1.28 to start the week during the 10/1 session. So far, as the European session started, the market showed strong demand keeping EUR/USD from falling below 1.28, and pushing it back around the 1.29 handle as we gear up for the 10/1 US session. Until the market clears the euro-us dollar above 1.2960, the it continues to be bearish based on the consistent lower highs and lower lows since topping near 1.3170.

Next support factors: If the market continues to chop downwards (fall in a very choppy manner), then the next pivot to monitor is at 1.2750. This was a support pivot in the 4H chart, as well as a previous resistance pivot seen in the daily chart during June.

It should be noted that if the EUR/USD gets to the 1.27-1.2750 area, it approaches a key rising trendline that goes back to the 1.2042 low from 7/24, as seen in the daily chart.

Clearing below 1.27 would be a major indication of bears taking over and refocusing on the 1.2042 area, although there are some other pivots to monitor before that. But let’s not get ahead of ourselves. For now, during the 10/1 US session, let’s see if the EUR/USD can hold below 1.2960, and push into newer lows as it has for the last 2 weeks.

Bullish outlook: A break above 1.2960 first exposes the 1.30 psychological handle, but also re-introduces the bullish outlook as it would be the first sign that the correction against the rally from July to September is over.

EUR/USD Daily Chart 10/01/2012 7:18AM EDT

EUR/USD 10/1/2012 daily Chart

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.

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