Previous: EUR/USD Trying to Push Below 1.26; Support Factors Around 1.2550 (7/2)

This Week: EUR/USD: Risk Events July 2 - July 6 (7/1)

EUR/USD 1H Chart 7/3/2012 11:05AM EDT

EUR/USD

The 1.2550 level is indeed provide some short-term support. It was the 1.2565 level during the 7/2 session, and 1.2553 level as support pivot during the 7/3 US trading session. The rally from 1.2550-1.26 during the 10:00AM EDT hour was supported by risk-on trading on the back of a positive US Factory Orders release.

The previous EUR/USD update noted that this 1.2540-1.2550 area contained some support factors, and that the RSI tends to stay above 40 if the market is still bullish from Friday's swing. So far, price action and momentum are still within the bullish scenario after sliding from 1.2690 to 1.2553.

Now, if the market pushes above 1.2620, it is likely going to push above this week's correction pattern. Accompanied by a break in the RSI above 60, this would be a bullish continuation signal.

But ahead of the key event risks on Thursday and Friday, the bullish outlook should probably be limited to a short-term resistance pivot of 1.2665, then the 1.2690-1.27 area.

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for 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.