Forex Technical Update
EUR/USD 1H Chart 1:36PM EDT 6/26/2012
The EUR/USD has been bearish since topping last week at 1.2745. The 6/26 US session traded the EUR/USD down to about 1.2440. The 1H chart shows a rejection from the downside and a bullish candle suggesting consolidation. The 1H RSI reading is showing an extended bullish divergence. This simply reflects the current loss of momentum. Sometimes it can be a sign before a reversal.
If there is a reversal, the market needs to break above 1.25 and the declining trendline seen in the 1H chart. Ability to hold above 1.25 opens up 1.26 area where the 200-hour SMA resides as well. This is between the 50% retracement (1.2590), and 61.8% retracement (1.2625). We can expect some bullish upside risk to this area within the bearish outlook. he 1.2540-1.2550 area was also a pivot seen in the 4H chart.
Above 1.2625 however, the picture does not looking bearish.
Also if the RSI does not break above 60, there is still general bearish momentum. A break above 60 however is a sign that the bearish outlook is weakening, and the market may be switching to optimism ahead of the EU summit this Thursday-Friay 6/28,-6/29.
EUR/USD 4H Chart 1:45PM EDT 6/26/2012
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes - provider of x News, Analysis, Education, Videos, Charts, and other trading resources.
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