Forex Technical Update
EUR/USD 4H Chart 7/18/2012 7:12AM EDT
The EUR/USD has not found a direction this week. The market has been relatively light on risk events, with the focus on Bernanke's testimony to senators, which is a 2-day event, ending in today's (7/18) US session. Perhaps there will be more conviction to a direction after that.
Heading into this risk event the EUR/USD still maintains a bearish bias in the 4H and 1H charts.
1) This week's high near 1.2310 is lower than the 1.2330 high from last week, though last week's low held.
2) After dipping below 30, the 4H RSI reading remained below 60 after this week's short-squeeze, showing that the bearish momentum is still intact in this time-frame.
3) The 1H RSI is also starting to lean bearish after it kissed 30 during the 7/17 session and has since failed to push back above 60. It is now falling back below 40, suggesting bearish momentum is starting to build in the near-term.
4) Bearish candles in both the 1H and 4H chart are stronger than the bullish candles during this week's consolidation.
If the market can push below 1.20, but then fail to pullback above 1.2250, then the market has likely started to build on top of these bearish biases.
EUR/USD 1H Chart 7/18/2012 7:13AM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of rex News, Analysis, Education, Videos, Charts, and other trading resources.
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