Forex Technical Update
EUR/USD 4H Chart 9/14/2012 9:35AM EDT
After briefly holding under 1.30 during late 9/13 US trading, the EUR/USD continued to surge higher through the 9/14 Asian-European session and into the subsequent US session. It is now cracking the 1.31 handle.
The question now is where might this rally finally take a break. We can probably expect some slow down as we get close to the next half and whole intervals like 1.3150, and 1.32, but a bullish market will now probably hold above 1.30 (given some elbow space around it).
Trendline resistance: The next major resistance is near 1.3270. This was a previous resistance pivot on 4/29 that was followed by a sharp decline in May through June and most of July. We will also likely meet the declining trendline that goes back to the 1.4940 high from May of 2011. This will be a major challenge for the EUR/USD.
Double dose of Euphoria: It should be noted that EUR/USD is steaming on two tracks right now. QE3, dubbed QE infinity because it has no fixed amount and is conditional to economic conditions AND the Eurozone bailout development. The high from these two hits is giving the market full-fledged risk-on that should slow down next week, even if the direction does continue.
2012 High: If the market pushes above 1.3270, 1.33 handle, the 1.3490, level, 50% retracement just above the 2012 high will be targeted.
EUR/USD Weekly Chart 9/14/2012
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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