Forex Technical Update

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EUR/USD 4H Chart 9:42AM EDT 6/19/2012

EUR/USD

The EUR/USD continues to mirror last week's action, which also started with a pop and an immediate fading of risk during the Monday session. After that, the market spent the rest of the climbing back up the week-high near 1.2666. As we wrapped up this week's Monday session, the EUR/USD also started to climb.

The 4H chart shows the market hold above a rising trendline which goes back to June 1 and holds a correction channel pattern.

For the 6/19 session, the 1.2660-1.2670 area (last week's high) will be a challenge. Above that the 1.2750 area, just above this week's high at about 1.2745 will be a challenge ahead of the FOMC meeting tomorrow, unless the market gets the idea that QE is a real possibility. I tend to believe that Bernanke will disappoint.

Still, the short-term 1H, 4H charts show that the market is bullish, and even though the structure of June's rally is corrective compared to May's decline which looks motive in nature, there is still upside toward 1.2820, 1.30 area, before the next panic-inducing headlines.

The bearish outlook is held off until we break below the rising correction trendline. At this point a break below 1.2550 might be the first sign. A break below 1.25 would be a more clear sign of a break to the downside, which opens up the 1.2285-1.23 May-June lows.

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.