Forex Technical Update
The US ISM Manufacturing PMI for April improved to 54.8 from 53.4, beating forecast of a slide to 53.0. The market showed risk appetite as we saw the S&P 500 popping up higher. Normally risk appetite pressures both the and the JPY. However, the better than expected US data also helps the USD in that it chips away at the prospect of QE3 or other monetary stimulus.
EUR/USD 1H Chart 5/1/2012, 10:45AM EDT
The 1H EUR/USD chart shows the reactive candle paring the overnight gains and testing the 1.32 handle, which the market rallied from during the 4/30 US session. Other support factors in the vicinity are the 200-hour simple moving average and a rising trendline both near 1.3190. Also the RSI is at 40. If the market is to maintain bullish momentum it should stay above 40, or push it right back above if it breaks it briefly.
A break below 1.3190 opens up the bearish outlook. There is a short-term support pivot near 1.3170. But if the market pulls back but respects the 1.32 area as resistance, the market would be giving a clear sign of bearish intention. The 1.2970-1.30 level will be key support and basically the extent of any bearish outlook that open up in the short-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.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.