EUR/USD 1H Chart 10/4/2012 9:13AM EDT
Bullish bias: The EUR/USD headed into the ECB interest rate announcement with a near-term bullish bias. The 1H chart shows the EUR/USD holding above 1.2880 during the 10/3 session. The means holding price above the middle, central pivot of a recently developing range. The 1H RSI reading also held above 40 and pushed back above 60 and even 70, showing maintenance of newly developing bullish momentum in this time-frame.
ECB: Ahead of the ECB interest rate announcement, the EUR/USD rallied to the range highs around 1.2960. The ECB held the minimum bid rate at 0.75% as expected. As the press conference with ECB president Mario Draghi began, the pair pushed toward 1.30 and saw resistance at this key barrier by the end of the question-answer session.
Bullish scenario: A push above 1.30 is seen as a bullish trigger. In the near-term a swing projection seen in the 4H chart targets the 1.3030-1.3035 area. If a correction comes, it should stay above the 1.2960 area to show clear bullish intent, opening up more upside toward toward 1.3083 pivot, 1.31 psychological handle, and the 1.3170 high.
Failed bullish attempt: A failure to push above 1.30, and a return below 1.2950 is a sign the EUR/USD bulls are exhausted in the short-term, giving way to further bearish correction, which has been the mode for this past 3 weeks.
EUR/USD 4H Chart 10/4/2012 9:15AM 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.
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