EUR/USD Holds at Triangle Support Ahead of Bernanke Speech

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EUR/USD 4H Chart 8/30/2012 3:30PM EDT

The EUR/USD is following the consolidation scenario so far ahead as world financial leaders get ready for the Jackson Hole Symposium. The 4H chart shows the pair now sitting on top of a projected triangle support. As the 8/30 US session winds down, the market is showing some demand here at this near-term trendline.

As noted in the previous update, a true breakout will be either a rally above 1.26 or a decline below 1.24. In the middle, the market is non-directional, or "noisy"

In this non-directional scenario, the near-term mode is consolidation. In the 1H chart, we had the RSI reading tag 30, and is now bouncing off this near-term oversold area. However, the upside is limited in such a consolidation mode.

The 1H chart shows the central pivot of the triangle in the 1.2530-1.2535 area. This is the "neutral" area of the triangle and can be expected to produce some intra-session choppiness.

Tomorrow (8/31), Bernanke will make a speech at the Jackson Hole Symposium in Wyoming. His tone on QE will be compared to that of the FOMC meeting minutes which showed more urgent consideration of easing. Maybe then, we can break out of the triangle. Then, if the break can sustain through the 1.24-1.26 range, we have a breakout and likely direction for the next week. Legarde, head of the IMF, will be speaking on Friday as well, but probably after retail trading ends, so the effects will not likely be seen on the charts until the start of next week's trading.

Watch out for the triangle and then the true range break!

EUR/USD 1H Chart 8/30/2012 3:40PM EDT

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.