Forex Technical Update
EUR/USD broke congestion yesterday to the downside but was supported by the 200 period simple moving average in the US session. It then rallied sharply again the Asian-European session breaking through 1.40 and 61.8% retracement of the swing from 1.4548 to 1.3145. The RSI has also returned above 60 after failing to break below 40, a reflection of bullish continuation momentum.
The daily chart shows the market about to break the bearish momentum it carried from August as the RSI attempts to break above 60. The market is also going to test the 200 period simple moving average near 1.41. The support now for further bull run is the 1.3930 pivot. If we see the market cross the 200SMA and also respect 1.3930 area as support, we can anticipate the current bull run to extend toward 1.4250, 78.6% retracement. Also note that the market could be testing a declining trendline by then.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources