Forex Technical Update
EUR/USD 4H Chart 5/2/2012, 7:25AM EDT
The EUR/USD indeed fell from a declining trendline (which was in the 1.3280-1.33 area) and in the 5/2 European session, extended that decline through a rising channel support. The 4H chart shows a heavy push through 1.32, and the pivot near 1.3170. The move also pushed price below the moving averages of periods from 200 down to 8 in the 4H time-frame. Entering the 5/2 US session, this breakout opens up the 1.2970-1.30 support zone.
EUR/USD 1H chart 5/2/2012 7:30AM EDT
Looking at the 1H chart, we see that the breakout established short-term bearish momentum with the RSI reading dipping below 30. This in the near-term might be a sign of oversold condition starting the 5/2 US session. If there is a pullback, a market should find resistance near the broken 1.3170 pivot level, while the RSI should be held below 50. Given some elbow space the bearish breakout can still confirm if the pullback does NOT push back above 1.32, and the RSI reading stays below 60.
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.
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