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EUR/USD 1H chart 5/10/2012 9:33AM EDT

EUR/USD

The EUR/USd is consolidating above the 1.29 handle. The 1H chart shows a triple bottom forming, with a break above 1.2970 to complete the pattern. This would suggest a near-term rally toward the 1.30 area. This short-term bullish outlook is within a bearish scenario at least toward the 1.2870 pivot area. But if the market can push above 1.30, and the RSI can go above 60, we would be showing a more significant correction and a loss of bearish momentum in the short-term.

If we open up above 1.30, the 1.3050 (near 38.2% retracement), and 1.31 (near 50.0% retracement and 200-hour SMA), are levels to monitor for re-selling, which targets 1.29 and 1.2870 in the short-term, and 1.2626-70 in the medium term.A return below 1.2950 should be the first sign that the bulls lose the very short-term control they have on the market since the start of the 5/10 global trading session.

A break above 1.3140 (61.8% retracement) should make the bearish outlook suspect especially if the 1H RSI can push above 70.

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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.