Forex Technical Update
A Risk-off start to the week gives the USD and JPY strength. The EUR/USD slid from lats Friday's congestion pattern and below the 1.3495 pivot. It also broke below a projected rising trendline. The RSI reading in the 1H chart is about to tag 30. These are all bearish continuation signs, to be confirmed if the market can clear last week's low at about 1.3420.
If there is a bounce from the 1.34 level the 1.3495 level should be monitored as resistance. If the market breaks above 1.35, the bearish outlook should be shelved and the period of consolidation continues. Still, there is major bearish bias until the market can break above the 200-hour simply moving average and a declining wedge resistance.
The short-term target to the downside is 1.3378, seen in the daily chart as the 78.6% retracement reinforced by a former pivot (on 9/23 and 9/26 as support). Below that we are looking at the September low in the 1.3140-1.3150 area.
Below this, we see a swing projection toward 1.2840, which is near the 2011 low established in January.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources