Forex Technical Update
The EUR/USD has been consolidating since the start of the week. Here in the 11/30 US session, we have a very sharp corrective rally. This moves the pair above 78.6% retracement at 1.3490, and broke the 1.35 psychological resistance. This sharp move also pushes above the 200SMA, the 1.34 resistance cluster, and now above 1.35.
The strength of today's rally suggests a bottom to the November bear cycle. But looking at the 4H chart, we still have one more key resistance to break to consider to scenario. We are still trading within a declining channel, with resistance near 1.3550 which is also the level of some common highs from the consolidation zone during Nov 16-23. Then we have a near-term resistance at the 1.36 handle, which is also near 38.2% retracement.
The upside opens up further if a throwback fails to break back below 1.3430. We still have the 1.3730, 50% retracement and 1.3850, 61.8% retracement levels to look forward to for the extension of the current corrective rally. Therefore, the short-term counter-trend bearish target from the channel resistance at 1.3550, should be limited to 1.3430 for now. A break below 1.3430 opens up the possibility of a bearish continuation if the channel resistance holds.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources