Forex Technical Update
The EUR/USD continues to rally in the short-term after finding support at 1.3030. It is pushing above the resistance area around 1.3160. The resistance to monitor is the 1.32 handle. We have the 50% retracement and 200 4H simple moving average just above 1.32. Above that, we are looking at the 1.3240-1.3250 area for resistance. This is 61.8% retracement and the previous double top support. If the market can hold below 1.3250 and push back below 1.3150, there is a good chance there is still a bearish bias at least toward the 1.30 handle. Otherwise, the daily chart shows a scenario that has some further upside.
First of all the RSI holding above 40 shows that there is still some bullish bias since rallying from the 1.2624 low at the beginning of 2012. The upside is set toward a projected triangle resistance which would be near 1.33 (78.6% retracement seen in the 4H chart). With this upside risk in consideration and the fact that bearish momentum has not returned in the daily chart, the bearish outlook from either 1.3250 or 1.33 should be limited to 1.3150 or at max triangle support near 1.3050.
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.
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