Forex Technical Update
The EUR/USD was trading in a triangle pattern in the 2/22 US session. It should be noted that during this time, the 1H RSI has remained above 40 (since popping back up above 1.30 on Feb 16). This suggests a persistent bullish momentum. By the 2/23 Asian-European session, it has popped up above this triangle and even broke the 1.3320 2012 high. Momentum also broke back to the upside as the RSI went above 60 and tagged 70.
As the 2/23 US trading session began, the pair was in a throwback so far held above 50% retracement of the rally from triangle base at 1.3186 to the 2012 high of 1.3342. There are selling interest here, but if the market can maintain above 1.3245, there could still be confirmation for the breakout. The bullish outlook has 1.35 in sight, with a more aggressive target toward a declining trendline that is just above the 1.36 handle.
Below 1.3240, AND if the RSI dips back below 40, the bull run has lost steam, and a false breakout can be considered. A short-term bear run to test the 1.30 lows may be in sight in this scenario in the context of a consolidation. Only a hold below that opens up a bearish outlook in the medium term.
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.