Forex Technical Update

Previous: EUR/USD Trading Down Near a Rising Trendline (8/15)

EUR/USD 1H Chart 8/15/2012 7:10AM EDT

"EUR/USD

The EUR/USD is finding support at a rising consolidation trendline that connects the low of 1.2042 low of 7/24 with the 1.2133 low of 8/2. The 1H chart shows a market losing momentum in the near-term as well, with the price-RSI reading showing a bullish divergence. The overall momentum has been range-bound.

If the price action whips back above the 1.2330 pivot as well as the 200-hour SMA, and the RSI pushes back above 60, we would be clearly back into the consolidation mode, with focus turned back to the upside, where a declining trendline is seen in the 4H chart. A break above 1.24 can probably clear the trendline, though a break above the 1.2442 pivot should be needed to suggest a breakout and extension of the corrective rally that started at the end of July.

If the rising trendline breaks during the 8/16 US session, we first should see if the 1.2240 pivot will hold. A break below that then suggests bearish direction in the short-term with the 1.2042 low in sight.

EUR/USD 4H Chart 8/15/2012 7:10AM EDT

"eurusd

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.