EUR/USD 1H Chart 4:25PM EDT 6/20/2012
The EUR/USD had a bullish stance ahead of the FOMC meeting and Bernanke's press conference today. The FOMC was expected to extend the Operation Twist program and did announce it will continue till year-end. QE however stays on the shelf but ready to be considered if necessary. The initial reaction in the EUR/USD was a dip to 1.2635 from about 1.2720. Then immediately, the market pushed it back up to 1.2740, just missing this week's high at 1.2745.
As we get into the final hours of the 6/20 US trading session, the market has yet to commit to a direction, with bulls and bears battling between the 1.2635 and 1.2740 FOMC-reaction range.
So far, it appears that the bullish momentum in the 1H chart is still intact, and it is trading in a rising corrective channel since June. Will the market continue to recover on the hopes of Europe moving towards a European fiscal union? Will Merkel make concessions in order to make this possible? If headlines continue to bring hope about this issue, EUR/USD might continue to rally like business as usual in June. A break above 1.2745/50 area should open up the 1.2820 pivot. Above that 1.30 would be the limit of the current bullish outlook.
To the downside, a break below 1.2635 only opens up a short-term bearish outlook toward the support factors within the corrective channel, seen in the 4H chart. The channel support is in the 1.2580-1.26 area. A break below 1.2530 would be a clearer sign of a breakout and suggests a bearish continuation.
EUR/USD 4H Chart 4:26PM EDT 6/20/2012
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.
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