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EUR/USD 1H Chart 9/24/2012 9:45AM EDT

EUR/USD 9/24/2012 1H Chart

Bearish Breakout: The 1H EUR/USD chart shows a market that is breaking lower after a corrective rally during the 9/21 session. If the EUR/USD can hold below the 1.2973 pivot, the market is likely still in bearish correction. A rally above 1.30 can return the focus to the upside. Remember that the EUR/USD was just bullish a couple of weeks ago going back to late  July. Where can we expect some support against the current bearish correction?

Support factors

The current 1.29 handle is showing some demand for EUR/USD, but the focus still appears to be bearish in the near-term. There is a minor pivot at 1.2875, but I think the more important support will be down in the  1.2815-1.2820 area.

In the daily chart, you see this as a previous pivot as well as a rising trendline that was broken as resistance as the EUR/USD accelerated early September. Also, the 200-day SMA is at about 1.2820. The 200 day SMA is not a support factor per se, but is a moving average highly monitored in the daily and weekly charts. Also, if the market bounces off the 200-day SMA, giving some elbow space, there would be a bullish “slingshot” signal.

Below 1.28, we have 1.2750 as a key pivot to monitor. The final line of defense against the bearish continuation scenario will be the rising trendline from late July.

EUR/USD day Chart 9/24/2012 9:50AM EDT

EUR/USD 9/24/2012 daily chart

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.

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